Russia's biggest food retailer, PJSC Magnit, has been upgraded to BB+, the highest non-investment grade, by international credit rating agency Standard & Poor's.
S&P expects continuous growth for the company despite Russia's struggling economy.
Magnit's competitor X5's rating got boosted up to BB-, the third highest non-investemnt grade.
"The upgrade reflects our expectation that Magnit will maintain its sound operating performance, despite though economic conditions in Russia." S&P said in a statement. "We think it will continue to grow over the next two years to gain higher market share and further strengthen its leading position in the food retail industry."
The Russian retailer has reached a total of 10.120 stores in early 2015 from 2197 just before the financial crisis in 2007 and is predicted to increase its revenue by 26 per cent this year according to a Bloomberg survey of analysts.
Magnit's "profitability benefits from increasing economies of scale and limited competition in rural areas" said S&P. "Magnit also enjoys strengthening bargaining power with its large suppliers, while strong control over operating costs led to improvements in operating margins over the past four years."
Bloomberg News, edited by ESM
