OREANDA-NEWS. May 6, 2010. Fitch Ratings has upgraded Russia-based OJSC Far East Telecom (also known as OAO Dalsvyaz) to Long-term Issuer Default Rating (IDR) 'BB' from 'BB-'. The Outlook is Stable. A full list of rating actions is detailed at the end of the commentary.

The upgrade of Far East Telecom reflects reduced refinancing risks following the extension of several undrawn revolving credit facilities with a domestic bank. This has substantially increased the company's liquidity which now fully covers its short-term maturities.

In addition, Far East Telecom is close to revising the repayment schedule for a substantial part of its debt from amortising to bullet, which will reduce short-term debt and lengthen the average maturity profile of its debt portfolio. As its debt is denominated in roubles the company is not exposed to foreign-currency risk.

The ratings continue to be supported by Far East Telecom's dominant market position in the fixed-line voice and broadband segments in its region, stable operating and financial performance, low leverage and positive free cash flow (FCF). Fitch expects FCF to remain positive in the medium term. At the same time, the agency notes that the company's FCF margin will largely depend on its control over capex.