S&P upgrades Kyivstar

Standard & Poor's said it raised its long-term corporate credit ratings on Ukraine-based CJSC Kyivstar GSM to BB- from B+ and the company's loan-participation notes issued by Dresdner Bank AG (A/stable/A-1) to BB- from B+.

The outlook is stable.

S&P said the rating action reflects Kyivstar's continued strong market performance. It also reflects growth in subscribers, EBITDA and operating cash flow generation in excess of earlier expectations, due to increased competition in mobile telecommunications in Ukraine and accelerated mobile penetration growth. Kyivstar has successfully defended its strong market position and maintained solid EBITDA profitability margins of 55.8% for the nine months to Sept. 30.

The ratings remain constrained, however, by the political, business and regulatory risks associated with operating in Ukraine (foreign currency BB-/stable/B; local currency BB/stable/B), the agency said.

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