S&P rates Krasnodar Krai bonds BB-/ruAA-

Standard & Poor's said it assigned a BB- global scale and ruAA- Russia national scale senior unsecured debt ratings to the proposed RUR 1.5 billion domestic bond to be issued by the Krasnodar Krai (BB-/positive; Russia national scale ruAA-).

The bond is amortizing, with 25% of the principal to be repaid on Dec. 17, 2010, 25% on Dec. 16, 2011 and the remaining 50% on Dec. 14, 2012. The issue will be placed on Dec. 21 with 10 semiannual, fixed-coupon payments and will mature in 2012.

Bondholders will have a put option on the third coupon payment of June 19, 2009.

Proceeds will be used to finance engineering infrastructure, construction, modernization of public sector buildings in the krai and other planned projects.

Ratings reflect the restricted predictability and flexibility of the krai's financial profile, high infrastructure needs and weak average income levels, S&P said.

Ratings are supported by the krai's well-diversified and growing economy, consistently sound financial performance and low debt, the agency said.

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