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-Fitch revises to "positive" outlook on Russian Altai region.

BANKING AND CREDIT NEWS-August 16, 2011--Fitch revises to "positive" outlook on Russian Altai region(C)2011 M2 COMMUNICATIONS

16 August 2011 - Fitch changed on Monday to "positive" from "stable" the outlook on Russia's Altai region while affirming its long-term foreign and local currency ratings at BB.

At the same time, the agency revised to "positive" from "stable" the outlook on its national long-term rating of AA-(rus) and confirmed its short-term foreign currency rating of B.

The outlook revision is based on Altai's adequate budgetary performance in 2010, its modest direct risk and contingent liabilities and prudent fiscal management, the agency explained.

According to the analysts, Altai's budgetary performance in 2011-2012 will consolidate with margins ranging between 16% and 18% with a low level of indebtedness. Positive rating guidelines include a consolidation of sound budgetary performance with operating margin over 15%, accompanied by moderate debt and favourable debt coverage ratios.

Fitch expects Altai's economy to improve by about 4%-5% year-on-year in 2011, which will bolster its continuously sound budgetary performance. However, Altai's gross regional product (GRP) is below the national medial stated per capita, which is partially due to the limited profitability of the local agricultural sector, which relies on on in-kind exchanges not captured by national statistics, the agency noted.

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Publication:M2 Banking & Credit News (BCN)
Date:Aug 16, 2011
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