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12.07.2007
Rating to city of Kamenets-Podolskiy affirmed at uaBB+
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today affirmed the long-term credit rating of uaBB+ (uaBB plus) with Stable Outlook assigned to the city of Kamenets-Podolskiy. To affirm the rating the agency considered City`s performance indicators for 2006 as well as other inside information furnished by the city council.
A credit rating of uaBB is a speculative grade rating, indicating a debt liability that is the LEAST AFFECTED BY THE RISK OF NONPAYMENT of the principal and interest among speculative grade ratings. This rating indicates that the obligor may not be able to meet in full its commitments on the given debt liability on a timely basis in the event of adverse changes in the business, financial or economic conditions in the Ukrainian financial market environment. However, the possibility of nonpayment in the near future is considered to be low. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories .
Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.
Factors maintaining the credit rating
- City`s key performance indicators have grown over 2006 as compared to 2005, in fact those of industrial production sales by 4.9% to UAH324.5m, of investments into fixed capital by 40.3% to UAH209.2m, of foreign investments by 14.1% to UAH8.9m, of retail turnover by 19.9% to UAH227.7m (in comparative prices).
- A number of City`s social development indicators have improved during 2006 as compared to the year earlier, specifically a 0.38 p.p. drop to 2.7% in unemployment rates (with the country`s average being 2.7%), a 28.2% growth in weighted average salary to UAH744.6 coupled with 41.3% decrease in its arrears to UAH1m.
- City does not have a direct debt as of Jan. 1, 2007.
Factors constraining the credit rating
- City`s budget growing dependency in 2006 upon transfers from the State budget, in fact the levelling donations accounted for 80.6% of the consolidated budget revenues excluding transfers (60.65 in 2005).
- Lower that the country`s average per capita indicators of economic development in 2006, in fact the industrial production sales is 3x, the direct foreign investments is 5.1x, investments into fixed capital is by 28.4%, the export turnover is 2x lower.
- The 2006 growth rates and size of salary is lower than the state-average.
- 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
