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14.12.2010
Credit-Rating downgrades city of Odessa and its debt
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it downgraded to uaBBB from uaA- (uaA minus) the long-term credit rating assigned to the city of Odessa and to its issue of coupon bonds for the amount of UAH400m with 5-year original maturity. The outlook on the rating is negative. To revise the rating Credit-Rating considered city’s social and economic, and financial indicators for 9M2010, amount of dynamics of its debt burden with consideration to possible arrangements between the city authorities and their creditors regarding changes in the procedure of repayment of external debt obligations.
This rating action that affects credit ratings assigned to the city of Odessa and its upcoming UAH400m bond issue has been triggered by poor execution of the city budget’s revenue side in this year under significant amount of consolidated debt and high portion of short-term obligations in its structure.
The negative outlook on the ratings is in response to anticipated retention of low pace of revenues in the city budget, which, in its turn, will weigh on accumulation of funds necessary for repayment of the debt. In case the risks associated with payments on obligations in the domestic market rise, Credit-Rating will further revise the city’s ratings.
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.
Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year, on condition that negative tendencies are retained and current risks are realized.
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:
Department of
Information and Communications
Sergey Rozumyak +38044490 25 50
SRozumyak@credit-rating.com.ua
Denis
Rudenko
DRudenko@credit-rating.ua
