(The following statement was released by the rating agency)
Sept 26 -
On Sept. 26, 2012, Standard & Poor's Ratings Services affirmed its 'BB'
long-term issuer credit rating and 'ruAA' Russia national scale rating on
Russia's Lipetsk Oblast. The ratings were subsequently withdrawn due to
contractual issues. At the time of withdrawal, the outlook was stable.
The ratings were constrained by the oblast's high dependence on a single
taxpayer, metallurgy company OJSC NLMK (BBB-/Negative/--; Russia national
scale 'ruAAA'), and the consequent volatility of its revenue and budgetary
performance. The developing, unbalanced institutional framework under which
Russian regions operate led to the oblast's low financial flexibility.
The ratings were supported by Lipetsk Oblast's modest debt levels and our view
of financial management as neutral for creditworthiness in an international
At the point of withdrawal, the outlook on the oblast was stable, reflecting
our opinion that despite an expected weakening of budgetary performance in
2012, Lipetsk Oblast would maintain a neutral liquidity position with cash and
committed credit lines well exceeding debt service falling due within the next
12 months. Our outlook factored in the oblast's adherence to cautious
financial management policies with continuing application of cost-containing
measures and reliance on medium-term borrowing.
Related Criteria And Research
-- Banking Industry Country Risk Assessment: Russia, March 19, 2012
-- Public Finance System Overview: The System For Russia's Regions Is
Developing And Unbalanced, Oct. 21, 2011
-- Methodology For Rating International Local And Regional Governments,
Sept. 20, 2010
-- Methodology And Assumptions For Analyzing The Liquidity Of Non-U.S.
Local And Regional Governments And Related Entities And For Rating Their
Commercial Paper Programs, Oct. 15, 2009
Issuer Credit Rating BB/Stable/--
Russia National Scale Rating ruAA
Issuer Credit Rating NR BB/Stable/--
Russia National Scale Rating NR ruAA