Research Update: Federal Grid Co. of the Unified Energy System 'BB+' Rating On Watch Pos On Restructuring News Oct 07

Standard & Poors, October 2007

Abstract
On Oct. 31, 2007, Standard & Poor's Ratings Services placed its 'BB+' long-term corporate credit and 'ruAA+' Russia national scale ratings on Russian electricity transmission grid operator Federal Grid Co. of the Unified Energy System (FGC) on CreditWatch with positive implications. The rating action follows approval by shareholders of FGC's 87.6% parent, RAO UES of Russia (BB/Watch Pos/--), for the second stage of RAO UES' restructuring and merger with FGC. The CreditWatch placement reflects our expectation that FGC's credit quality will improve as the RAO UES reorganization progresses. Standard & Poor's expects that FGC will manage the substantial short-term pressure on its liquidity coming from the reorganization, which is the group's major outstanding restructuring risk. We also expect that the...

Companies mentioned in this report are: Federal Grid Co. of the Unified Energy System
Action: On CreditWatch:Positive

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Product Type: Research Update
Research updates complement media releases. They offer more depth and detail than summary analyses by incorporating all information published in the media release. They are more up to date than summaries in that they are published simultaneously with media releases.

Federal Grid Co. of the Unified Energy System

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