Fitch rates Mobile TeleSystems BB+

Fitch Ratings said it assigned OJSC Mobile TeleSystems a long-term issuer default rating of BB+, national long-term rating of AA(rus) and short-term issuer default rating of B.

The outlooks for the long-term issuer default rating and national long-term rating are stable.

The agency said it also assigned BB+ ratings to two of Mobile TeleSystems's outstanding eurobonds, structured as senior unsecured obligations, as follows: $400 million of 8.375% notes issued by MTS Finance SA and $400 million of 8% notes issued by MTS Finance and fully and unconditionally guaranteed by MTS, due on Jan. 28, 2012, both with long-term foreign currency ratings of BB+.

"Mobile TeleSystems is a highly profitable and operationally successful mobile operator in the CIS region that achieved a relatively mature stage in its business cycle as evidenced by its positive free cash flow generation. However, the company is not immune to the group-wide risks of JSFC Sistema, its controlling shareholder, which is a credit constraint," said Nikolay Lukashevich, senior director in Fitch's TMT team.

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