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21.06.2007
Credit rating to debt obligation by city of Ivano-Frankivsk affirmed at uaBBB
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today affirmed at uaBBB the long-term credit rating assigned to UAH5.5m 5-year debt obligation by city of Ivano-Frankivsk (`City`). Outlook on the rating is Stable. To revise the rating the agency considered City`s social and economic development indicators for 2006 as well as other inside information furnished by the city council.
A credit rating of uaBBB is an investment grade rating, indicating an ADEQUATE CAPACITY to pay both interest and principal on the given debt liability in the Ukrainian financial market environment. This rating indicates a level of creditworthiness that is more susceptible to adverse changes in commercial, financial and economic conditions than debt obligations with higher investment grade ratings.
Factors maintaining the credit rating
- Growth in all indicators of City`s economic development as compared to 2005, specifically the retail turnover rose 51.5% to UAH1,208.3m, the industrial production sales grew 24.1% to UAH768.9m, the investments into fixed capital grew 56% to UAH751.9m (in comparable prices), the foreign investments grew 21.4% to USD28.8m.
- Retention of upward trend in labour market development during 2006 compared to 2005, specifically the number of permanent employees (excluding those of small businesses) rose 7.1%; the weighted average salary grew 29.9% having amounted to UAH958.8; the registered unemployment decreased by 0.4 p.p. to 1.1%.
- Low debt burden on City budget, in fact 3% to budget revenues excluding transfers in 2006.
Factors constraining the credit rating
- The specific gravity of transfers in budget revenues remains relatively high making up 29.5% of the budget revenues.
- The weighted average salary in the City is lower than that average in Ukraine amounting to 92% of the state level.
- Certain per capita indicators of City`s economic development are lower than those averages of Ukraine, specifically the industrial production sales is lower 3x, the foreign investments is lower 3.7x, the foreign trade turnover is lower 2.3x.
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
