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09.11.2005
"uaBB" credit rating assigned to Ivano-Frankovsk city
Today the independent rating agency announced a long term «uaBBB» rating assignment to upcoming borrowing of Ivano-Frankivsk city for 5,5 million UAH with five year circulation period. The rating outlook is stable. In the process of analysis «Credit-Rating» agency has used a complete financial statement of the municipality, as well as internal information, given by the city council.
Factors supporting the rating level:
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General income growth of the city budget (from 71,5 million UAH in 2000 up to 109,9 million UAH in 2004) without taking into consideration transfers from the state budget; and it is expected to increase in 2005 up to 141,6 million UAH. For the first half of 2005 actual realization of budget income was 46% of revised annual plan;
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Absence of the city’s debt obligations as of July 01, 2005;
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Key indices growth of city’s social-economic development in 2000-2004 and the first half of 2005; however some indices’ growth weren’t stable;
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Improvement of investment climate in Ivano-Frankivsk city area, reflected in annual domestic and foreign investments growth during last 3 years;
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Growing demand for real estate and lands in the city, reflected in annual budget earning increase (during 2002 – 2004 earnings increased two times and a half);
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Arrears of wages reduction since December 31, 2000 till October 01, 2005 nineteen times and a half;
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Comparatively high weight of city’s economically active population (71,05% of total population).
Factors restricting the rating level:
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Insufficient income flexibility, dependence of income part of the budget upon interbudget system changes and taxation rates, which are revised on a state level;
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Low budget income diversification, natural person income tax is more than 50% of all budget earnings (without taking transfers into consideration);
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City’s growing dependence upon fund borrowings for temporary cash gaps compensation: fund borrowings total volume ratio and total budget fund income comes to 56,7% in 2004; during the first half of current year – 51,9%;
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The wage rates are lower than average wages in Ukraine, as of 01.07.05 – 635 UAH or 91% of state level;
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Aging of population and high rate of hidden citizens’ migration at the same time.
Information on the assigned credit ratings according to the Ukrainian national scale is available at the internet site of «Credit-Rating» company www.credit-rating.com.ua, as well as in informational systems of REUTERS and BLOOMBERG
Should you need more detailed information, please contact “Credit-Rating” agency,
Kyiv (+38044 490 25 50, fax +38044 490 25 54)
