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10.06.2010
Credit-Rating Assigns Donetsk City Council Upcoming Bonds uaAA
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it assigned a long-term credit rating of uaAA to coupon bonds (series F) to be issued by Donetsk City Council. The amount of the issue is UAH60m due Dec. 31, 2015. The outlook on the rating is stable. In the course of the rating procedure Credit-Rating considered city’s social and economic indicators recorded in 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 revenues to the city budget’s general fund (exclusive of transfers) during 2005-2009, with the city’s budget funding retaining at high level as compared to other similar Ukrainian cities (in terms of population and status): the amount of budget receipts calculated per capita was UAH1629 in 2009 versus UAH1656.5 in 2008.
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Modest direct debt burden on the city budget as ay Apr. 1, 2010, with its moderate anticipated growth.
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The budget revenues have no concentrations by major tax payers.
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Growth of monthly average salary in 2.3 times over 2004-2009 to UAH2339.8, which is 22.8% higher than the country’s average.
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Extensive experience of the city mayor and its team, coupled with high consolidation of the city authorities.
Factors constraining the credit rating
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High deterioration of city’s fixed assets, including the housing sector, utilities and transport infrastructure, which require significant investments for their renovation combined with high population’s arrears for utilities services 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
