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05.07.2007
Сity of Cherkasy assigned uaBBB credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBBB long-term credit rating to city of Cherkasy and affirmed the uaBBB long-term credit rating to UAH5m 5-year City`s bond issue. Outlooks on both ratings are Stable. In the course of analysis Credit-Rating considered City`s key financial and economic indicators for 2002-2006 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
- The city budget`s incomes excluding transfers have grown 33.9% over 2006 as compared to the previous budget period.
- Lowered city budget dependency upon transfers from higher-level budgets, in fact the approved volume of leveling subsidies from the State budget decreased 7.1x to UAH2.9m amounting to 1.2% from the overall city budget fund excluding transfers.
- City`s social development indicators have improved over 2006 as compared to 2005, specifically the registered unemployment rates decreased to 2%, which is 0.7 p.p. lower than that average of the country coupled with the growing number of employees in all industries and their salaries, which remain higher-than-average of the country.
- City`s key economic development indicators have grown over 2002-2006, in fact that of industrial production sales, of investments into fixed capital, of export and retail turnover, of direct foreign investments and of residential construction.
- Low City`s direct debt as of Jan. 1, 2007.
Factors constraining the credit rating
- Certain City`s per capita social and economic development indicators (e.g. of residential premises built, of direct foreign investments) remained lower than those averages of the country.
- High deterioration of main funds, including the residential buildings and the utility and transport infrastructure entailed by need in significant investments for their renovation.
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
