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18.06.2007
Credit rating to city of Brovary affirmed at uaBBB-
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today affirmed at uaBBB- (uaBBB minus) the long-term credit rating assigned to city of Brovary (`City`). Outlook on the rating is Stable. To revise the rating the agency took into consideration City`s performance indicators for 2006 as well as other inside information furnished by the city council.
The uaBBB issuer rating reflects obligor`s adequate capacity to timely and in full meet its commitments on the obligations in the Ukrainian financial market environment. There is, though, a higher vulnerability to the effect of adverse changes in business, financial and economic conditions as compared to obligors with higher ratings.
The plus (+) or minus (-) modifier denotes rating`s relative status within major categories.
Stable Outlook denotes that there are no anticipated reasons to change rating in the course of the year.
Factors maintaining the credit rating
- Growth in City`s investment activity in 2006 as compared to 2005, specifically the investments into fixed capital rose 65.5% (this per capita indicator is 87.4% higher than that average of the country); the volume of foreign investments attracted grew 39.9% (this per capita indicator is 39.8% higher than that average of the country); the volume of residential premises constructed grew 17.7% (this indicator per 1,000 residents 4.1x exceeds that average of the country).
- The average monthly salary grew 32.2% in 2006 to UAH1,162.4, which is 11.6% higher than that average of the country entailed by the 2.8x decrease in salary arrears to UAH146.3K.
- City`s change in status of a recipient to donor, specifically 2006 saw no leveling subsidies from the State budget, yet the City commenced transferring funds to the State budget.
- The city council has no direct debt as of Jan. 1, 2007.
Factors constraining the credit rating
- Up to 30% of able-bodied City`s residents are employed in the city of Kiev, which constricts the taxation basis of budget revenues from natural person tax, entailed by the retained burden on budget expenditures.
- The slowdown in industrial production growth rates (103.2% in 2006 compared to 118.0% in 2005) due to decline in output rates at certain companies being important for the City`s economy.
- High deterioration of main funds, including the utility infrastructure entailed by need in significant investments for the renovation of city`s utility infrastructure.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found in the REUTERS, BLOOMBERG and FTN MONITOR information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
