OREANDA-NEWS. On 25 July 2008 Credit-Rating, a nationally recognized credit rating agency in Ukraine, assigned a long-term credit rating of uaA to UAH 250m 3-year registered upcoming interest-bearing bonds (B series) to be issued by Kiev-based Ukrtelecom OJSC (`Issuer` or `Company`). The company`s principal activity is rendering of the full spectrum of telecommunication services is Ukraine. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2001-2007 and 1Q2008 as well as other inside information provided by the Company.

An obligor or a debt liability with uaA credit rating is characterized with the high strong creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is susceptible to adverse changes in commercial, financial and economic conditions.

Factors Maintaining the Credit Rating:

Monopolistic position in the market of fixed-line telephony and possession of the national base infrastructure that provides access to more than 10m telephone subscribers;

Low debt burden: in 2007 ratios of the joint debt to EBІTDA and equity were 1,41 and 0,31 respectively;

Growth of the telecommunication services market and such trend expected to be further retained.

Factors Constraining the Credit Rating:

Decrease in demand for the services of fixed-line telephony (according to the results of 2007 the Company collected 93% of the revenues from rendering of such services);

Expected significant amounts of capital investments to be made in near future including development of mobile communication.