S&P lifts Russian Vologda Oblast

Standard & Poor's said it raised its long-term issuer credit rating on the Russian Vologda Oblast to BB- from B+.

At the same time, the Russia national-scale rating on Vologda was raised to ruAA- from ruA, the agency said.

The outlook is stable.

According to S&P, the upgrade reflects the growth of revenues, improved financial performance, strengthened liquidity and low debt level that Vologda is expected to maintain in the medium term.

The ratings continue to be constrained by revenue volatility due to persistent dependence on OAO Severstal (BB-/stable, ruAA-), consequent exposure to fluctuations in the steel market and low financial flexibility and predictability, the agency noted.

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