S&P cuts RusHydro to negative

Standard & Poor's said it revised its outlook on RusHydro to negative from stable.

At the same time, the agency said it affirmed the BB+ long-term and B short-term corporate credit ratings and ruAA+ Russia national scale rating on RusHydro.

The agency also affirmed the BB+ issue rating on the RUB 20 billion 7 7/8% loan participation notes due 2015 issued by orphan special-purpose vehicle RusHydro Finance Ltd. and the BB+ issue rating on the RUB 20 billion proceeds loan lent by RusHydro Finance Ltd. to RusHydro. The recovery rating on the loan is unchanged.

S&P said the outlook revision reflects its view that RusHydro could struggle to restore its financial risk profile to levels we would consider commensurate with the long-term rating. This is a result of S&P's revised financial projections that forecast increasing debt leverage for RusHydro, the agency said.

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