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15.09.2010
Credit-Rating Affirms City of Kharkiv at uaA
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it affirmed long-term credit ratings of city of Kharkiv and of debt obligation of Kharkiv city council at uaA. The outlook on the rating is stable. To revise the ratings Credit-Rating considered city’s social and economic, and financial indicators for 1H2010 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 level of budget provisioning that retained in 1H2010: the estimated amount of revenues to the city budget’s general fund exclusive of transfers was recorded per capita at UAH657.3 (UAH628.7 in 1H2009).
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Absence of direct debt burden as at Jul. 1, 2010, coupled with moderate anticipated in the debt burden.
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No concentrations in the budget revenues by principal tax-payers.
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Certain indicators of economic development calculated per capita were in 1H2010 in excess of the corresponding national figures, specifically that of foreign turnover of goods – by 10%, amount of foreign direct investments – by 35.2%, amount of retail turnover of goods – by 85.9%.
Factors constraining the credit rating
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Decline in amount of receipts to the city’s development budget in January-June 2010 versus similar year-earlier period due to stringent economic environment in Ukraine.
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The level of monthly average salary in the city is lower than the national average accompanied by outpacing rise in the amount of salary arrears (compared with that of amount of salary) during 1H2010 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 70% in 1H2010).
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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
