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18.12.2007
Credit-Rating upgrades city of Zaporizhiya`s bonds to uaAA-
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today upgraded to uaAA- (uaAA minus) from uaA the long-term credit rating carrying Stable outlook assigned to UAH75m coupon bonds (B-E series) due 2010, which were issued by Zaporizhya city council (`City`). In the course of the rating`s revision procedure Credit-Rating considered City`s social-economic and financial indicators for 1H2007 as well as other inside information furnished by the City.
An obligor or a debt liability with uaAA credit rating is characterized with the VERY STRONG creditworthiness as compared to other Ukrainian obligors or debt liabilities. 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 City enjoys low direct debt as of Jul. 1, 2007, specifically the direct debt accounts for 7.5 per cent of the 2007 budget amended incomes excl. transfers.
- The decreased City budget`s dependency on attraction of loans from the general treasury account: the amount of the loan attracted in 1H2007 did not exceed 1 per cent of the annual expenditures of the budget general fund attributable to 2007 (2006: 17.5 per cent).
- City`s growing key indicators in January-June 2007 as compared to the similar year-earlier period: the industrial production sales rose 35 per cent; the retail turnover grew 42.2 per cent, export turnover increased by 45.3 per cent. These indicators calculated per capita exceed the national averages 4x, 1.7x, and 3.2x respectively.
- The City`s social development indicators improved in January-June 2007: the number of employees increased by 2.4 per cent to 297.6K, which accounted for 39 per cent of the overall City`s population; the average monthly salary grew 16.2 per cent to UAH1,420, which exceeds 16 per cent the national average; the unemployment rate retained at 0.6 per cent, which is 3.8x lower than the national average.
Factors constraining the credit rating
- High deterioration of City`s main funds, including the home sector, utilities and transport infrastructure, which requires significant investments for their renovation combined with high population`s arrears for utilities services as calculated per capita.
- High pollution of environment, which negatively affect City`s social sector.
Information on all credit ratings assigned in accordance with the National Scale may be found in REUTERS and BLOOMBERG information systems.
For more information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
