S&P revises VimpelCom to stable

Standard & Poor's said it revised its outlook on VimpelCom Ltd. to stable from positive and affirmed the BB long-term foreign and local currency corporate credit ratings.

The agency also affirmed its BB issue and 3 recovery ratings on VimpelCom's debt and the debt issued by subsidiaries Vimpel-Communications OJSC and VimpelCom Holdings BV.

S&P said the outlook revision reflects its view that VimpelCom's credit metrics are unlikely to strengthen to a level commensurate with a BB+ rating in the next 18 months. This is because the Russian ruble and Ukrainian hryvnia devaluations, coupled with negative organic growth in these markets, have dragged down VimpelCom's revenues and EBITDA.

These two countries together accounted for 40%-45% of group consolidated revenues and EBITDA in the first nine months of 2014, and Russia is the group's domestic market.

S&P now anticipates under its base case that VimpelCom's total revenues and EBITDA will likely contract by about 15% year-on-year in 2015, after a similar expected drop in 2014, owing both to the weakening conditions in Russia and Ukraine and negative trends in other key markets, such as Italy.

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