S&P rates Vologda bond B+

Standard & Poor's said it assigned a B+ and ruA+ debt ratings to the proposed RUB 2.51 billion senior unsecured bond to be issued by the Vologda oblast.

The recovery rating on the proposed bond is 3, indicating 50% to 70% expected recovery in a default.

The B+ long-term issuer credit and ruA+ Russia national scale ratings on Vologda were affirmed.

The outlook is stable.

The ratings are constrained by the oblast's high revenue volatility stemming from high concentration in the steelmaking industry, low revenue and spending flexibility, along with weak budgetary performance that has resulted in debt accumulation and rising debt-service commitments, S&P said.

The ratings are supported by its so-far moderate debt burden by international standards and modest contingent liabilities, the agency said.

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