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28.07.2010
Credit-Rating Assigns City of Lviv 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 the city of Lviv (‘city’). The agency has also assigned a long-term credit rating to the issue of coupon bonds (series A, B, C) to be issued by the city council for the amount of UAH292.2m. The outlook on the ratings 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 revenues to the city budget’s general fund exclusive of transfers during 2005-2008 with high provisioning in 2009 of the city budget: the estimated amount of revenues to the city budget’s general fund exclusive of transfers per one inhabitant is UAH1337.8 (UAH1346 in 2008).
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No concentrations in the receipts to the budget by principal tax payers.
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Certain indicators of city’s economic development was in excess of the corresponding national figures during 2005-2009, specifically the volume of homes commissioned, the retail turnover of goods, and fixed capital investments exceeded national per capita figures 1.8x, 2.1x, and 1.3x respectively (calculated per 1000 inhabitants of the current population).
Factors constraining the credit rating
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The city budget revenues decreased in 2009 weighed by adverse environment in Ukraine’s economy coupled with poor fulfillment of the city budget revenues in 1H2010.
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The level of monthly average salary in the city is lower than the national average (by 4.3% in 2009) accompanied by rising amount of salary arrears during 2007-2009 under dependency of the city budget revenues upon receipts from the individual income tax (the specific gravity of this source in revenues to the city budget’s general fund exclusive of transfers was recorded at 75% in 2009).
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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.
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
