print
29.08.2007
Credit rating to the city of Donetsk upgraded to uaA
Credit-Rating, a nationally-recognized credit rating agency in Ukraine, has today upgraded to uaA from uaA- (uaA minus) the credit rating assigned to the city of Donetsk. The agency has also upgraded from uaA- (uaA minus) to uaA the credit rating to UAH 50m 5-year City`s bond issue. The outlook is Positive. To revise the rating, the agency used City`s performance indicators for 2006 and 1Q2007 as well as other inside information furnished by the city council.
An obligor or a debt liability with uaA credit rating is characterized with the STRONG creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is susceptible to adverse changes in commercial, financial and economic conditions.
A Positive outlook indicates that there is a possibility to upgrade the rating in the course of the year, on the condition that positive tendencies are maintained and that current risks are reduced.
Factors maintaining a credit rating:
- A sizable growth (by 30.7%) of the city`s budget revenue item excluding transfers to UAH 1 billion in 2006 as compared to the previous budget period;
- Improved main indices of the city`s social development in 2006 and 1Q2007 as compared to the previous year: the level of official unemployment was very low (0.7% or by 4 times less than the national official unemployment level), an increase in the average number of employed in all economic sectors and an increased level in the average monthly salary (to UAH 1 457.9 in 1Q2007) which is higher than average level in the country
- Increase of the City`s key economic development indicators over 2006 and 1Q2007: sales of industrial products increased, investments in fixed capital increased, foreign turnover of goods increased, retail turnover of goods increased and there was an increase in residential construction
- As of January 01, 2007, the Donetsk City Council had a low level of direct debt, namely the direct debt load was 11.4% in the year 2006 .
Factors constraining a credit rating:
- High level of current population debts for the used public utilities and heavy depreciation of fixed assets including utility systems, transport infrastructure and the need for considerable capital investments for the modernization of the 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
