Moody's rates Kyivstar notes B2

Moody's Investors Services assigned a prospective B2 rating to Kyivstar's GSM's proposed issuance of about $285 million in senior unsecured notes.

Moody's also assigned a B2 rating to the company's new $75 million in senior secured revolving credit facility maturing in 2007 and affirmed Kyivstar's B2 senior implied and unsecured issuer ratings and its B2 rating on the company's existing $160 million 12.75% senior unsecured notes due 2005.

The outlook is positive.

Total debt/EBITDA is expected to remain at or below 1.0x, while EBITDA/net cash interest expense is expected to remain above 9.0x.

Moody's said the ratings reflects continued broad-based country risks associated with the Ukrainian market, including business, legal and regulatory frameworks which remain in flux as the country continues to transition to a full market economy.

The ratings also incorporate low levels of per capita income which may ultimately limit mobile penetration levels in the future or place pressure on the company's blended average revenues per user as incremental subscriber adds are likely to be of progressively lower quality going forward.

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