S&P affirms Pyaterochka

Standard & Poor's said it affirmed its BB- long-term corporate credit rating on Pyaterochka Holding NV.

At the same time, S&P said it affirmed its BB- long-term corporate credit and AA-(ru) Russia national-scale ratings on Pyaterochka's guaranteed operating subsidiary OOO Agrotorg.

The AA-(ru) Russia national-scale ratings on the senior unsecured and senior secured debt issued by related entity Pyaterochka Finance have also been affirmed, the agency added.

All ratings were removed from CreditWatch with negative implications, where they had been placed on April 12, following Pyaterochka's announced acquisition of Perekrestok (not rated), the agency said.

The outlook is negative.

The affirmation reflects S&P's view that the increase in financial risk after the acquisition of Perekrestok - highlighted by growth of financial leverage, with adjusted debt to EBITDA expected to reach 4.5 times in 2006 - is offset by the expectation that Pyaterochka will progressively restore a less-aggressive financial profile.

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