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IDGC of Centre, JSC is awarded BB-/ruAA/ ratings, forecast – “Stable”

18 November 2009

Analysts of Standard & Poor’s believe that IDGC of Centre, JSC has “moderate” probability to obtain urgent, duly and enough support on the part of the Russian Government in stress situation. Own creditability of the company is estimated at B+ level, it reflects the opinion of the international rating agency on “acceptable” profile of business-risks and “aggressive“ profile of financial risks of the company.

The forecast “stable” reflects expectations of Standard and Poor’s that risks connected with refinancing, collecting of accounts receivable, large-scale investment program and overspending of money will be soothed by such factors as the state support, favorable decisions of regulating bodies, acceptable liquidity management and moderate level of financial leverage.

In IDGC of Centre, JSC levels the opinion of S&P on “moderate” probability to obtain urgent, duly and enough support on the part of the Russian Government in stress situation is taken into account. IDGC of Centre, JSC plays important role for the state as it ensures rendering of the most important infrastructural services in the region of servicing. The Company has “limited” links with the state, taking onto account the fact that the state possesses IDGC of Centre, JSC, indirectly, analysts remark.

Evgeny Bronnikov, Deputy General Director for economy and finance of IDGC of Centre, JSC, remarked: “Award of credit rating by the international rating agency is good news for us. BB-/ruAA-, forecast “Stable” is positive result for today. We are sure that rating award will contribute reduction of borrowing value and fair estimate of IDGC of Centre, JSC by the investment community. In this case credit rating receipt is good start for the active work on increase of the company’s investment attractiveness. Besides, this is one of stages in increase of efficiency and transparence of the company’s activity and one more impetus in the growth of level of financial, corporate and investment management as well as information transparency”.

Improvement of liquidity position, positive results of implementation of tariff formation mode on RAB basis and successful costs control as well as moderate financial policy can contribute increase of ratings. 

Apart from IDGC of Centre, JSC, Standard & Poor’s rating is awarded to five public Russian power companies of power sector.

Company Rating
“Mosenergo” BB-/Credit Watch Negative
IDGC of Centre, JSC BB-/Stable
Moscow unified power company BB+/Negative
“RusGidro” BBB-/Credit Watch Negative
Federal grid company BBB/Negative

For reference:
* Standard & Poor’s (S&P) is the subsidiary of McGraw-Hill corporation, which is engaged in analytical research of financial market. Alongside with Moody’s and Fitch Ratings this company belongs to three the most powerful international rating agencies. S&P is known as the founder and editor of the American stock index S&P 500 and the Australian S&P 200. Credit rating is independent and reliable estimate of the issuer’s creditability, on the basis of which market participants can take grounded financial decisions.

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