Press releases

print 07.09.2005

Bond issue of the Donetsk city credit rating affirmed at "uaBBB+"

Independent rating agency Credit-Rating on Wednesday announced confirmation of a long term “uaBBB+” credit rating of the city of Donetsk on the Ukrainian national scale. The forecast of the rating is stable.

The credit rating was supported by the following factors:

Maintenance of high tempos of increase for most major indices of social economic development of the city based on the results of the first half-year in 2005, especially in the sphere of investment activities (18.3%) and in trade (+43%);
Positive financial result of the city enterprises and organizations’ activities in the first quarter of 2005; Tax and fee collections were 3.8 billion UAH, 1.3 times higher than for the corresponding period in 2004;
Maintenance of a stable situation on the labor markets as the result of low nemployment level (0.75%) and creation of new jobs (12,800);
Increase in average monthly salaries up to 901.3 UAH which exceeds by 2 times the subsistence level that was established for 2005; it is 1.25 times higher than the average salary in Ukraine;
Over fulfillment of the taxes/fees part of the budget in the I quarter of 2005 to the level of 102.8%;
Maintenance of the low indebtedness loading on the city budget (8.5%).

The credit rating is constrained by:

Perseverance of negative dynamic of industrial products production (-27%) stipulated by production reduction at the enterprises that belong to the basic industries such as metallurgic (-45.2%), machine building industry (-33.9%) and by-product coke [chemical-recovery coke] industry (-21.5%);
Export goods volume decrease by 8.4 % due to the unfavorable state of foreign markets for the enterprises of the city that are oriented towards export;
High level salary arrears (30.6million UAH) and its increase by 60% since the beginning of the year;
Problems in municipal housing sphere of the city (high depreciation level of the municipal housing capital funds facilities;
Under fulfillment of tax funds incoming to the budget item, “taxes on natural persons (physical bodies)” by 2.5% due to the increase of planning tasks during 6 months of 2005, industrial production volume decrease and growth of salary arrears.