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11.06.2007
Bond issue by city of Lutsk assigned uaBBB+. Press-conference
uaBBB+ long-term credit rating to 3-year UAH10m bond issue by city of Lutsk.
The journalists’ questions were answered by Credit-Rating CEO Stanislav Dubko and Lutsk Mayor Bohdan Shiba.
‘The city’s indicators are high even being compared to other big
cities, which are the agency’s clients’- Mr. Dubko said opening the conference. According
to Credit-Rating CEO, such indicators as volumes of output and of sales of industrial
production, investments into fixed capital, direct foreign investments, retail turnover
exceed those averages of Ukraine, with this factor having a significant impact on the
rating assigned. Among other positive factors were mentioned the following: positive
dynamics in city’s key indicators of social development in 2004-2006 (the natural growth
of population, increase in number of employees entailed by decrease in unemployment
rates), growth of budget revenues resulting in 28.6% reduction in the leveling subsidies
from the State budget in 2007, the null in city’s direct debt as of Jan. 1, 2007 entailed
by its moderate growth during 2007. ‘The budget revenues are growing entailed by
proportional decline in the volume of subsidies’ – Mr. Dubko said.
Among the factors constraining the credit rating, Mr. Dubko noted the following: city’s dependency on official transfers from the State budget; modest salary level (according to January-November 2006 data it was 11.1% lower than that average of Ukraine), high concentration of industrial production sales on two Lutsk-based companies – Lutsk Automobile Plant OJSC and SKF Ukraine OJSC, and a traditional problem for major of Ukrainian cities of high level of deterioration of main funds, including utility facilities, and necessity in capital investments into city’s infrastructure.
| ‘The assignment of the rating has, surely, enhanced the city’s reputation. This allows us to build up a basis for investment attraction’ – Bohdan Shiba said. According to the city mayor, the city is planning to attract funds to different spheres, for at present over 60% of foreign investments are directed to industry, namely to machine-building. ‘There are also planned other investment objectives, specifically the food and processing industry. The goal we are setting is the development of investment programs. We take part in contests conducted by both the Association of Ukrainian Cities and in the framework of overseas financial projects. We have already reaped the first fruits – we cooperate with city of Lublin in the EU framework.’ – Mr. Shiba said. |  |
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According to Mr. Shiba, the city administration plans to support investment projects
at the Automobile Plant, Cardboard and Ruberoid Combine, and those aimed at modernization
of city’s infrastructure. The city is also considering the construction of a
garbage-processing plant to service the entire Volyn region.
As Mr. Shiba said, UAH 8 million of 10 million to-be-attracted funds shall be aimed at renewal of roads surface, with UAH 2 million being directed to reconstruction of roofs of residential buildings, since it is very big problem for the city. ‘Such plans are complicated and large-scale, being impossibly achieved without attracted funds. In the course of implementation of this project we will try to confirm city’s high reputation to further attract larger amounts of funds for city’s social and economic development’ – the city mayor said. |
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
