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22.09.2010
Credit-Rating Assigns Kramatorsk City Council’s Bonds uaBBB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it assigned a long-term credit rating of uaBBB to coupon bonds (series B, C, D) issued by Kramatorsk city council (‘city’). The amount of the issue is UAH20m, due Dec. 31, 2013. The outlook on the rating is stable. To assign the rating Credit-Rating considered city’s social and economic indicators for 2005-2009 and 1H2010 and other inside information furnished by the city council.
An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is affected by 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 in 2005-2008, with retaining adequate provisioning of the city budget in 2009 and 1H2010.
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Moderate debt burden of Kramatorsk city council.
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In 2005-2009 certain indicators of the city’s economic development were in excess of the corresponding national average figures: in 2009 the amount of industrial production sales and the volume of external turnover of goods were in excess of the country’s average of 1.6 times per capita.
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Certain indicators of the city’s social development in the period under analysis (excluding 2009) were in excess of the corresponding average national figures: in 1Q2010 the monthly average salary and the specific gravity of employees in the city’s population exceeded national indicators 3.6% and 1.2 p.p. respectively.
Factors constraining the credit rating
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Contracted city budget revenues in 2009 weighed by adversities in Ukraine’s economy.
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High dependency of the city budget upon receipts from Novokramatorsky Machine-Building Plant CJSC (this company provides for over 30% of the volume of receipts to the city budget’s general fund exclusive of transfers).
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The city budget remains dependant upon equalization grants from the State budget, which ratio to the amount of revenues to the city budget’s general fund exclusive of transfers planned for 2010 was recorded at 24.1%.
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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
