Fitch rates VolgaTelecom debt A+(rus)

Fitch Ratings said it assigned OJSC VolgaTelecom a long-term issuer default rating of BB-, national long-term rating of A+(rus) and short-term issuer default rating of B. The agency also assigned a national long-term rating of A+(rus) to three of Volga's outstanding senior unsecured domestic bonds, including a series 2, RUR3 billion issue (due Nov 2010); series 3, RUR2.3 billion issue (due Nov 2010); and series 4, RUR3 billion issue (due Sept 2013).

The outlook is stable.

The company has consistently been the most profitable and one of the least leveraged Russian incumbent operators, Fitch said. The ratings take into account its established industry position and competitive and cost advantages, the agency added.

Although the company is only a niche mobile operator, the segment's margins are strong and the business is run as a cash cow with a positive contribution to overall margins and cash flows, Fitch said.

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