Fitch upgrades Lenta to BB/AA-(rus)

Fitch Ratings said it upgraded Lenta LLC's long-term foreign and local currency issuer default ratings to BB from BB- and its national long-term rating to AA-(rus) from A+(rus).

The outlooks are stable.

Fitch said the upgrade reflects the company’s proven execution of its sales growth strategy while maintaining strong profitability so far.

The agency also expects Lenta will be able to further strengthen its market position and enlarge business scale over the medium-term, while keeping conservative credit metrics consistent with the assigned ratings. This is based on Fitch’s assumption that the company will maintain strict financial discipline, rigorous control over costs and deliver positive like-for-like (LfL) sales growth, as it continues to execute its expansion plans.

The ratings also take into account Lenta's ability to raise equity to fund store roll-outs and manage its leverage as proven in 2015, Fitch added.

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