S&P ups Mosenergo

Standard & Poor's said it raised its long-term corporate credit and Russian national-scale ratings on Mosenergo (AO) to BB/ruAA from B/ruA-.

Both ratings were removed from CreditWatch, where they were placed with positive implications on Dec. 22, 2006, following Mosenergo shareholders' approval of a share issue to OAO Gazprom (BBB/stable), the agency said.

The outlook is stable.

The upgrade reflects improvement in Mosenergo's regulatory environment, stronger financial performance and completion of the RUR 60.7 billion equity increase, which improved the company's capital structure and liquidity position, S&P noted.

The agency added that the ratings reflect Mosenergo's growing exposure to the volatile spot electricity market, opaque, albeit improving, heat tariff regulation, ambitious investment program, creating significant external funding requirements and concentrated customer base.

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