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25.05.2010
Credit-Rating rates Kharkiv City Council’s upcoming bonds at uaA
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it assigned a long-term credit rating of uaA to coupon bonds (series D) to be issued by Kharkiv city council (‘city’). The amount of the issue is UAH500m due Jul. 21, 2015. The outlook on the rating is stable. In the course of the rating procedure Credit-Rating considered city’s social and economic, and financial indicators for 2005-2009 and other information furnished by the city council.
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.
Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.
Factors maintaining the credit rating
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High growth rates of receipts to the city budget’s general fund exclusive of transfers (at 123-144%) during 2005-2008 combined with satisfactory (comparative to other Ukrainian cities) execution of the annual plan in this regard in 2009.
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The city does not have any direct debts as at Jan. 1, 2010, coupled with moderate anticipated debt burden.
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The budget receipts are not concentrated by major tax payers.
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The majority of city’s per capita indicators were in excess of the corresponding national figures in 2009: the industrial production sales – by 5.1%; foreign direct investments – by 38.3%; retail goods turnover – by 87.1%; homes commissioned per 1000 inhabitants – by 53.3%.
Factors constraining the credit rating
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The amount of receipts to the city’s development budget decreased in 2009 versus 2008 due to downturn in Ukraine’s economy.
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The monthly average salary in the city is below the national average combined with outpacing growth of salary arrears over growth of salaries recorded during 2006-2009 with the budget incomes being dependant upon receipts from individual tax (the specific gravity of this source in overall receipts of the city budget’s general fund exclusive of transfers was recorded at 67.9% in 2009.
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High deterioration of fixed assets, including the housing sector and infrastructure, which requires considerable investments for their renovation, under high population’s debts for utilities if calculated per capita.
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
