S&P ups Vodokanal from junk

Standard & Poor's said it raised the long-term corporate credit rating on Vodokanal St. Petersburg to BBB- from BB+, the short-term credit rating to A-3 from B and the Russia national scale rating to ruAAA from ruAA+.

The outlook is stable.

S&P said the upgrade reflects an improvement in the credit quality of the issuer's owner, the City of St. Petersburg, which was upgraded to BBB/stable on March 6.

Ratings reflect the issuer's strategic importance to St. Petersburg, strong financial support from the city, relatively supportive tariff regulation and the company's monopoly position in its service area, the agency said.

These strengths are mitigated by aged operating assets, operating risk resulting from the deteriorating quality of water supply, tightening quality standards, uncertain timeliness of owner support, weak liquidity and aggressive liquidity management, S&P said.

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