S&P changes Sistema view to stable

Standard & Poor's said it revised its outlook on Sistema (JSFC) to stable from negative and affirmed the long-term corporate credit rating at BB and senior unsecured debt at BB.

S&P said the outlook change reflects Sistema's successful settlement of the civil case related to oil company Bashneft, with Sistema being recognized as a good-faith buyer. Sistema won the civil case against LLC Ural-Invest, one of the companies that sold Bashneft to Sistema in 2009, for the recovery of losses after Bashneft returned to Russian government ownership last October.

Sistema received around RUB 50 billion (equivalent to about $900 million) in compensation.

The stable outlook also reflects the agency’s expectation that the company is committed to maintaining a loan-to-value ratio below 20% and total coverage ratios above 1 time. (The total coverage ratio equals dividends and management fees received, divided by operating expenses, tax, net interest expenses and dividends paid.)

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