S&P raises VimpelCom to BB-

Standard & Poor's said it raised its long-term corporate credit rating on Russian mobile telecommunications provider Vimpel-Communications to BB- from B+, reflecting the company's successful expansion of operations and improved financial performance and credit metrics.

The outlook is positive.

At the same time, S&P assigned its BB- senior unsecured debt rating to Vimpelcom's proposed loan participation notes of about $300 million to be issued by - but without recourse to - UBS (Luxemburg) SA, for the sole purpose of funding an intended loan of a similar amount to VimpelCom.

The proceeds from the issue are to be used by VimpelCom for funding capital expenditures and debt refinancing in 2004.

"The rating actions reflect the adequately managed expansion of Vimpelcom's operations in Russia and the company's demonstrated ability to improve financial performance and overcome regulatory issues, which could have potentially negative consequences, in a challenging business environment," said S&P credit analyst Pavel Kochanov.

"VimpelCom has demonstrated a capacity to cope with market and regulatory challenges in Russia, as illustrated by its solid profitability and strengthened market position."

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