S&P upgrades Surgut

Standard & Poor's said it raised the Russian City of Surgut's long-term foreign currency issuer credit rating to BB- from B and its Russia national scale rating to ruAA- from ruA. The outlook is stable.

The upgrade reflects the stabilization of the city's revenue base and responsibilities following recent municipal reform, the agency said. The action is further supported by Surgut's sustained sound budgetary performance, low debt burden - there are no plans to increase debt beyond 20% of revenues in the medium term - high wealth levels and sophisticated management.

S&P said the ratings on Surgut are constrained by the city's heavy dependence on the oil company JSC Surgutneftegas, low revenue flexibility and continuing dependence on subsidies from the Khanty-Mansiysk Autonomous Okrug (BB+/positive), where the city is located.

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