OREANDA-NEWS. June 14, 2007. Southern Telecommunications Company [(RTS: KUBN, KUBNP; MICEX: UTEL, UTELP; ADR OTS: STJSY, KUE FRA)], the largest fixed-line operator in the Southern Federal District of Russia, hereby announces that on June 6, 2007 rating Agency Standards & Poors assigned STC a long-term credit rating of B- and ruBBB on the national scale, placing the company on CreditWatch with a positive outlook.

According to the report by Standard & Poor’s, this decision reflects STC’s ability to improve its creditworthiness, taking into account the company’s clear success in gradually reducing its liquidity risk, strengthening its financial position and maintaining its improved trend in operating indicators.

 The ratings will be removed from CreditWatch after the company releases its 2006 audited IAS financial statement and a meeting is arranged between analysts of Standard & Poor’s with the management of STC for the purpose of discussing the company’s business strategy and financial plans.