Moody's affirms Southern Telecom

Moody's Investors Service said it affirmed the B3 corporate family rating of OAO Southern Telecommunications Co. following the announcement Thursday by Moody's that the ratings of the Russian Federation have been put on review for possible upgrade.

As a government-related issuer, Southern Telecom's ratings factor expected government support which is reflected in the low support and medium dependence assumptions made by Moody's as part of its joint default analysis for government-related issuers.

The affirmation of Southern Telecom's ratings is based on Moody's view that, given the unchanged assumptions on government support and dependence, a one-notch upgrade of the Russian Federation's ratings would not result in a change in the ratings of Southern Telecom, which currently has a baseline credit assessment of 6.

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