OREANDA-NEWS. Fitch Ratings upgraded Centertelecom’s Long-term Issuer Default Rating (“IDR”) to ‘B’ (outlook: positive) from ‘B-’ (B minus), and National Long-term rating to ‘BBB(rus)’ from ‘BB+(rus)’. Short-term IDR has been affirmed at ‘B’. The rating of the series 05 bonds has also been upgraded to ‘BBB(rus)’ from ‘BB+(rus)’ and its recovery rating is affirmed at ‘RR4’.
 
According to Fitch Ratings, the IDR rating upgrade reflects CenterTelecom’s significant de-leveraging and debt restructuring in 2006, following the adoption of a more conservative financial policy, which reduced Net Debt to EBITDA to 2.1x in 2006, compared with 3.1x in 2005. CenterTelecom has showed significant operational performance improvement due to cutting back on its investments, reducing headcount numbers and operational costs, capitalizing on the tariff rebalance and improved regulatory environment, as well as reducing financing costs, said Nikolai Lukashevich, Fitch’s analyst.
 
Fitch Ratings’ experts also point out that CenterTelecom benefits from broad network coverage and customer base, also good positions to grow its share in the fast growing broadband market. Besides Fitch considers, that CenterTelecom’s debt restructuring programme aimed at reducing interest costs and extends the maturity profile of the company’s financial obligations, has already proven successful and has left a positive mark on the liquidity position of the company. At the same time the ratings reflect the fact that the company’s leverage profile remains at the higher end compared to its peers.