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18.06.2010
Credit-Rating Assigns Zaporizhzhia City Council’s Upcoming Bond Issue uaAA-
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it assigned a long-term credit rating of uaAA- (uaAA minus) to coupon bonds (series I, J) to be issued by Zaporizhzhia city council (‘city’) for the amount of UAH25m due Dec. 31, 2013. 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 uaAA credit rating is characterized with the VERY STRONG creditworthiness as compared to other Ukrainian obligors or debt liabilities. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).
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 2005-2008, with the city’s budget funding retaining in 2009 at high level: the amount of budget receipts calculated per capita was UAH1373.3 in 2009 versus UAH1495.4 in 2008.
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Modest direct debt burden on the city budget.
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The majority of city’s social and economic indicators were in excess of the corresponding national figures during 2004-2009: the industrial production sales, retail goods turnover, and fixed capital investments exceeded average national figures by 3.2x, 1.4x, and 1.2x respectively.
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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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The pace of receipts to the city budget decelerated due to the crisis in Ukraine’s economy, including metallurgy and machine-building sectors, which are represented by the city’s biggest companies that contribute to a. 25% of the city budget revenues exclusive of transfers.
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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
