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20.05.2009
Credit-Rating assigns City of Ivano-Frankivsk uaBBB+
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it assigned a long-term credit rating of uaBBB+ (uaBBB plus) to the city of Ivano-Frankivsk (`city`). In the course of the rating procedure Credit-Rating considered city`s social-economic and financial indicators for 2004-2008 and other information furnished by the city council.
An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is 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
- High growth rates of budget revenues in the city`s general budget fund exclusive of transfers recorded over the past 3 years, specifically the amount of revenues was in excess of 32.4% in 2006, of 47.5% in 2007, and of 35.2% in 2008 as compared to the respective previous periods.
- No concentrations in budget revenues by principal tax payers.
- Low city`s direct debt burden as of Jan. 1, 2009 of 1.5%.
- The city`s key economic figures rose over 2004-2008, in fact the amount of fixed capital investments increased 5.8x to UAH1.8bn; the retail turnover grew 5.1x to UAH2.6bn. These indicators calculated per capita were in excess of corresponding country`s averages of 1.5x and 2x respectively.
Factors constraining the credit rating
- Deceleration in growth rates of budget revenues in 2009, which has been prompted by negative impact of economic downturn in Ukraine.
- The city budget remains dependant upon equalization grants from the state budget, which ratio to the planned amount of revenues in city budget`s general fund exclusive of transfers was recorded at 6.5%.
- The level of monthly average salary in 2008 was 10% lower than the country`s average, accompanied by city budget`s dependency upon gains from individuals` tax (the specific gravity of this source in city budget`s general fund exclusive of transfers was recorded at around 75%).
- High deterioration of the city`s utilities and transport infrastructure and of the housing sector, combined with necessity in significant investments for their renovation.
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
