S&P upgrades MegaFon

Standard & Poor's said it raised Russia-based OJSC MegaFon's long-term corporate credit rating to BB- from B+, national scale rating to ruAA- from ruA+ and MefaFon SA's senior unsecured debt rating to BB- from B+. The outlook is stable.

S&P said the rating action reflects the company's strengthening business profile, marked by its expanding scale, improving network quality and reach, resilient market share despite a tough competitive environment, positive operating performance and improving profitability.

The ratings remain constrained by intensifying competition in the Russian market, the company's continuing aggressive growth and negative free cash flow generation, its considerable debt leverage and the uncertainty regarding Russia's evolving regulatory, economic and industry environment, the agency said.

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