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09.01.2008
Credit-Rating rates city of Rubizhne at uaBB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term credit rating of uaBB to the city of Rubizhne (`City`). The outlook on the rating is stable. In the course of analysis Credit-Rating considered City`s social-economic and financial indicators for 2002-2006 and 1H2007, information on municipal property, City`s management system, 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.
`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 budget enjoyed no dependency upon attractions from the general treasury account and its zero direct debt as of Jul. 1, 2007.
- The City mayor is well experienced in municipal management, which, coupled with high consolidation of the City government, contributes to implementation of City`s development plan.
Factors constraining the credit rating
- The City is dependant upon transfers from the State budget, in fact upon leveling subsidies, which specific gravity in budget incomes approved for 2007 account for 54 per cent.
- The City budget is highly dependant upon gains from 2 companies, namely Rubezhnoye State Chemical Plant ZARJA and Rubezhnoye Cardboard and Package Mill (over 53 per cent of budget revenues excl. transfers in 2006).
- The average wage in the City is 11 per cent lower than the national average (in 1H2007) combined with dependency of budget revenues upon gains from individuals tax (which specific gravity in general budget revenues excl. transfers makes up a. 70 per cent).
- Some indicators of City`s social and economic development in 2002-2006 and 1H2007 were lower than the national average, specifically the fixed-capital investments was 47 per cent lower, the retail turnover was 58 per cent lower, coupled with the twice above the national average unemployment rate.
- There are limited possibilities for budget incomes, which is associated with low number of objects disposed by the City, which may possibly be sold out.
- High deterioration of City`s fixed assets, including the housing sector, utilities and transport infrastructure, which requires significant investments for their renovations accompanied by high population`s arrears for utilities services.
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
