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19.05.2009
Credit-Rating assigns Kamyanets-Podilskyi City Council’s upcoming bonds uaBB+
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it assigned a long-term credit rating of uaBB+ (uaBB plus) to coupon bonds (series A, B) to be issued by Kamyanets-Podilskyi city council (`city`). The amount of the issue is UAH20m, with 4-year original maturity. In the course of the rating procedure Credit-Rating considered city`s key social-economic and financial indicators for 2004-2008 and other 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. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).
Factors maintaining the credit rating
- The growth rates of revenues in city budget`s general fund excluding transfers retained in 2008: the amount of revenues is in excess of 30.3% as compared with year-earlier indicator.
- Zero concentration in tax revenues by principal tax payers.
- The city`s key economic figures rose over 2008 as compared with 2007, in fact the volume of industrial production sales grew 2x to UAH1.2bn; the retail turnover advanced 1.4x to UAH424.6m; the external goods turnover increased 1.9x to UAH230.3m; and the fixed capital investments soared by 15.2% to UAH322m
- Improvement in certain indicators of city`s social development in 2008: the population grew by 1.2% to 101.2K; the number of employees (excluding small businesses) increased by 2.5% to 22.9K, and the monthly average salary advanced by 34.9% to UAH1,308.4.
Factors constraining the credit rating
- Growing dependency of city budget upon equalization grants from the State budget, which ratio to the revenues of the city budget`s general fund excluding transfers was recorded at 64.2% in 2007 and at 73.9% in 2008, with this ration expected to rise to 85.6% in 2009.
- The monthly average salary in the city recorded for 2008 was 27.6% lower than the country`s average, accompanied by dependency of the budget revenues upon gains from individuals` tax (the specific gravity of this source in the city budget`s general fund excluding transfers was about 80%), coupled with anticipated deceleration of growth rates in the monthly average salary.
- Decrease in planned budget revenues in 2009 under downturn in the country`s economy.
- High deterioration of city`s infrastructure and housing sector, and necessity in significant investments for their renovation.
- The majority of city`s per capita indicators mirroring its economic development in 2008 are lower than the country`s averages.
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
Denis Rudenko
DRudenko@credit-rating.ua
