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16.04.2009
Credit-Rating: Potential and Prospects for Industrial Cities Under Crisis
The economic downturn, which occurred in the majority of Ukraine`s industries in 2H2008, has affected not only cities` current creditworthiness, but has also predetermined in many aspects their capacities to meet the middle- and long-term obligations. The most vulnerable may be the situation in those cities, which planned to repay their debts in the current year at the expense of new borrowings, since there is low possibility to get fresh funds today. Unlike in other business activities, Credit-Rating notes that in municipal sector the obligors carry moderate debt burdens, combined with recently evolved credit culture of local authorities. This to certain extent will contribute to mitigation of risks of cities` failure to meet their obligations.
In the course of rating process Credit-Rating structures cities by their productive peculiarities. While the Ukraine`s industrial cities, which traditionally are drivers of country`s economic growth generating major part of revenues in budgets of all levels, were the first to face adverse effects of economic crisis, the agency deems necessary to highlight key difficulties the cities are currently encountering.
In Credit-Rating`s view, the anticipated retention and aggravation of crisis in the national economy in 2009 will doubt abilities of industrial cities to adjust to new conditions retaining their industrial potential, and to fund necessary budget programs.
Information on all credit ratings assigned in accordance with the National Rating Scale may be found in REUTERS and BLOOMBERG information systems.
For more information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.ua
Denis Rudenko
DRudenko@credit-rating.ua
