Fitch rates North-West Telecom bond A(rus)

Fitch Ratings said it affirmed Russia-based OAO North-West Telecom's issuer default rating at B+, national long-term rating at A(rus) and short-term rating at B and removed them from Rating Watch evolving.

Fitch also assigned an expected national long-term rating of A(rus) to the company's planned RUB2 billion domestic bond maturing in five years.

The outlook is stable.

The Rating Watch was resolved after the company's board recommended an acquisition of 100% of PTT, an alternative telecoms operator in St. Petersburg, for $97 million. The agency said this acquisition will allow North-West to become the owner of core infrastructure on which it is heavily dependent, increasing its operating flexibility.

The transaction is unlikely to result in a significant increase in the company's leverage, Fitch said; however the valuation report suggests that long-term financial synergies of the acquisition are likely to be lower than implied.

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