S&P rates Sakha bond B+/ruA+

Standard & Poor's said it assigned a B+ long-term debt rating and ruA+ Russia national scale rating to the proposed RUR 2.5 billion senior unsecured three-year bond to be placed by the Republic of Sakha (B+/stable; Russia national scale ruA+) on May 29.

The bond will have 12 quarterly coupon payments of 8.8% each and will be amortizing, with 30% of the principal to be repaid in 2009, another 20% in 2010 and the remainder at the maturity date in 2011.

The bond ratings are equalized with the ratings on the Republic of Sakha.

Ratings are constrained by the issuer's remote location in the Far East of the Russian Federation (foreign-currency BBB+/positive/A-2; local-currency A-/positive/A-2; Russia national scale rating ruAAA) and the concentration of its economic and tax base.

These weaknesses are partially mitigated by Sakha's economy, which generates high per capita revenue, and by its improving financial management, the agency said.

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