S&P: RAO UES unaffected

Standard & Poor's said that its credit ratings on vertically integrated power and heat utility RAO UES of Russia (B+/stable/--; Russia national scale ruA+) remained unaffected by the group's expected €757 million acquisition of two Bulgarian thermal power plants.

RAO UES offered the highest price in the plants' privatization tender, and the transaction is expected to close in the coming months.

S&P said the acquisitions are expected to be debt funded at the RAO UES holding company level, leaving the group's financial profile still strong for the rating considering its low leverage. S&P said it expects this debt to be passed on to one or several of the group's subsidiaries as part of its reorganization scheduled for 2006.

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