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06.07.2007
Rating to city of Nikolayev affirmed at uaBBB
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today affirmed the long-term credit rating of uaBBB assigned to city of Nikolayev (`City`). Outlook on the rating is Stable. In the course of analysis Credit-Rating considered City`s key performance indicators for 2006 as well as other inside information furnished by 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 .
Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.
Factors maintaining the credit rating
- Growth in City`s key performance indicators during 2006 as compared to 2005, specifically that of industrial production sales by 14.5%, of investments into fixed capital by 20.9%, of retail and of export turnover by 57.6% and 12.1% respectively.
- The rates of registered unemployment has declined in 2006 by 0.2 p.p. to 0.8%, which is 3.4x lower than that average of the country, coupled with rise in number of employees and in their salaries as compared to 2005.
- As city budget accumulated significant funds by 2005 year-end , City had no need in 2006 to attract short-term loans for covering temporary cash spreads.
- City`s low direct debt, which amounted to UAH2.1m as of Jul. 1, 2007 of 0.7% of the budget revenues excluding transfers and funds transferred from the general to the special fund.
Factors constraining the credit rating
- Growth rates of City`s expenses exceed those of the city budget revenues, which resulted in the fact that City was getting the levelling subsidies from the State budget, which specific gravity made up 7.4%.
- Certain City`s per capita indicators in 2006 (of residential premises built, of direct foreign investments) is lower than those averages of the country.
- The weighted average salary is 2.4% lower than that average of the country, moreover, the salary arrears have grown 1.7x to UAH18.4m over 2006.
- High deterioration of residential premises and of utility infrastructure requiring 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
