S&P raises Moscow City Telephone outlook to positive

Standard & Poor's said it revised its outlook on Moscow City Telephone Network (JSC) to positive from stable.

At the same time, S&P said it affirmed its BB- long-term corporate credit rating and raised to ruAA from ruAA- its Russia national-scale rating on the company.

S&P added that the outlook revision and one-notch national-scale rating upgrade reflect the improving credit profile and potential for an upgrade of the company's ultimate parent, Sistema (JSFC), which has indirect control over Moscow City Telephone's strategy and financial policy through a 51% stake in Comstar United TeleSystems (JSC) (BB-/positive), which in turn has a 67% voting interest in Moscow City Telephone.

Sistema's corporate credit rating currently caps that on Moscow City Telephone, the agency said.

Nevertheless, the rating benefits from the company's dominant share of Moscow's residential fixed-line market, favorable financial and operating performance, strong liquidity and synergetic integration with Sistema's alternative telecoms operators consolidated under Comstar's corporate umbrella, the agency said.

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