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09.11.2007
Credit-Rating: Kamyanets-Podilskyi city`s rating affirmed at uaBB+
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today affirmed at uaBB+ (uaBB plus) the long-term credit rating assigned to the city of Kamyanets-Podilskyi (`City`). The outlook on the rating is stable. To revise the rating Credit-Rating considered City`s social and economic, and financial indicators for 1H2007 as well as other inside information furnished by the city council.
An obligor or a debt liability with uaBB credit rating is characterized with the LOWER THAN SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is strongly affected by adverse changes in commercial, financial and economic conditions. 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
- The majority of City`s economic development indicators have grown in 1H2007 as compared to 1H2006: the industrial production sales rose 42.7 per cent to UAH200.1m (in actual prices); the retail goods turnover grew 36.8 per cent to UAH139.5m (in comparative prices).
- Certain City`s social development indicators grew in 2006; specifically the monthly average salary grew 18.9 per cent to UAH885.6 accompanied by 28.6 per cent decrease in salary arrears to UAH752.7K.
- The City does not have a direct debt as of Jul. 1, 2007.
Factors constraining the credit rating
- The city budget`s growing dependency in 2007 upon transfers from the State budget, in fact the levelling subsidies accounts for 82.7 per cent of the City budget incomes excluding transfers (80.6 per cent in 2006).
- The majority of City`s key figures are lower than those averages per capita of the country in 1H2007: the industrial production sales is 2.9x lower, the direct foreign investments is 5.7x lower, the investments in fixed capital is 47.7 per cent lower, the export turnover is 2.2x lower.
- City budget`s revenues are dependant upon incomes from the individuals` tax (the specific gravity of this source in total budget incomes excluding transfers accounts for over 57 per cent) coupled with the low recent salary growth rates. The average salary in the City in1H2007 was lower than the country`s average (UAH885.6 and UAH1,225 respectively).
- High deterioration of city`s main funds, including housing sector, utility and transport infrastructure, which requires significant investments for their renovation.
Information on all credit ratings assigned in accordance with the Ukrainian national scale may be found in 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
