S&P: Kyivstar positive

Standard & Poor's said it revised its outlook on Ukraine-based mobile telecommunications operator CJSC Kyivstar GSM to positive from stable, reflecting S&P's expectation that a ratings increase is possible in the medium term should the company successfully defend its strong market position and maintain solid profitability margins.

At the same time, S&P affirmed its B long-term corporate credit and senior unsecured debt ratings on Kyivstar, and assigned its B senior unsecured debt rating to the company's estimated $285 million proposed loan participation notes to be issued by Dresdner Bank AG (A/negative/A-1), for the sole purpose of funding an intended loan of similar amount to Kyivstar.

"The affirmation of the ratings reflects the company's strong position in the Ukrainian market and its ability to cope with strong growth in demand for mobile telephony services, which has led to high capital requirements, and increasing competition and subsequent pricing pressure," said S&P credit analyst Michael O'Brien. "The affirmation also reflects Kyivstar's ability to increase its debt burden to fund network investments without threatening its long-term credit quality."

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