S&P rates Moscow Oblast notes ruAA-

Standard & Poor's said it assigned its ruAA- Russia national scale rating to the proposed Russian ruble 12 billion senior unsecured bond with amortizing repayment schedule to be issued by the Moscow Oblast (foreign currency BB-/stable/--; Russia national scale rating ruAA-).

The rating on the bond is equalized with the national scale rating on the Oblast. The issue will be placed on April 5. It will have 10 semi-annual coupon payments of 10% per year each, and a five-year maturity. One-quarter of principal will be redeemed in October 2005, another one-quarter will be redeemed in October 2007, with the remaining 50% of the issue to be redeemed in 2010.

"With this issue, the Oblast's direct debt is expected to reach a moderate level of 35% of operating revenues by the end of 2005, while the deficit after capital expenditures is not expected to exceed 10% of total revenues over the next two to three years. The Moscow Oblast's debt structure has improved, with about 85% of direct debt having a maturity of more than one year," said S&P credit analyst Felix Ejgel.

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