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08.12.2008
Credit-Rating affirms City of Odessa at uaA
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it affirmed at uaA the long-term credit rating assigned to the city of Odessa (`city`). The rating outlook has been changed to negative.
An obligor or a debt liability with uaA credit rating is characterized with the HIGH 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.
Negative outlook indicates that there is a possibility to downgrade the city`s rating in the course of the year, due to decline in growth rates of city budget revenues prompted by negative trends in Ukraine`s real estate sector and anticipated decrease in the amount of city`s wage fund due to crisis in the national economy.
Factors maintaining the credit rating
- High fulfillment of adjusted annual plan by budget`s fixed revenues in 1H2008.
- Further growth of city`s key figures recorded during 1H2008, the majority of which calculated per capita are in excess of the national averages.
- The retention of positive trend of city`s social development indicators in 1H2008.
Factors constraining the credit rating
- Poor fulfillment of adjusted annual plan by the budget`s own revenues recorded in 1H2008 due to negative trends in real estate sector.
- The level of wages in the city is lower than the country`s average.
- Dependency of city budget upon equalization grants from the State Budget.
- High deterioration of fixed assets, including the housing sector, utilities and transport infrastructure, which requires significant investments for their renovation.
- Anticipated decline in growth rates of the city budget revenues in 2009 due to crisis in Ukraine`s economy. Thereat, the coordinated actions of city`s authorities contribute to implementation of city`s social and economic development.
Thereat, Credit-Rating notes that the short-term city`s solvency sustains, being underpinned by priority in servicing and repayment of outstanding obligations, coupled with moderate debt burden in the city budget.
Information on all credit ratings assigned in accordance with the National Rating 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.ua
