print
11.12.2009
Credit-Rating downgrades ratings of City of Lutsk and its bonds
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it downgraded to uaC from uaBBB+ (uaBBB plus) the long-term credit rating assigned to coupon bonds (series 1-A) issued by Lutsk City Council. Credit-Rating has also downgraded to uaBB from uaBBB+ (uaBBB plus) the long-term credit rating assigned to the city of Lutsk and to its bonds (series 1-B, 1-C, 1-D, 1-E). All of the ratings remain on Rating Watch List (‘RWL’) with negative outlook.
The downgrade of the rating assigned to series 1-A bonds, which are to be redeemed on Dec. 17, 2009 was prompted by city’s inability to accumulate funds necessary for making timely and full payments on the obligation. The reasons for such inability are poor execution of the city budget revenues in the current year and unavailability of free funds on city’s accounts and of funding sources.
Earlier in October 2009 the ratings were placed on Rating Watch List with negative outlook because of high probability for city’s failure to execute its budget revenues in full and opacity with regard to reaching agreements for restructuring the bond issues.
Further Credit-Rating’s rating actions on the bonds placed on the RWL will be contingent upon the nature of agreements concluded by the issuer with holders of series 1-A bonds.
The uaC rating denotes that the obligor is EXPECTED TO DEFAULT on its debt liabilities.
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.
Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year, on condition that negative tendencies are retained and current risks are realized.
The Rating Watch List intends for informing the financial market participants about possible changes of ratings in short-term prospective. The rating placed on RWL denotes that Credit-Rating is currently considering its change as a result of events or ongoing negative trends, which may negatively affect creditworthiness of a rating’s bearer.
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 +38044490 25 50
SRozumyak@credit-rating.com.ua
Denis
Rudenko
DRudenko@credit-rating.ua
