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21.12.2006
Credit ratings assigned to the city of Donetsk affirmed
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today affirmed the uaA- (uaA minus) long-term credit rating assigned to the city of Donetsk and the uaA- (uaA minus) long-term credit rating assigned to bonds issued by the city of Donetsk for the amount of UAH 50m with the 5-year original maturity. Outlooks on both ratings are Stable. To revise the ratings "Credit-Rating" took into consideration city`s economic and financial indicators for 9 months of 2006 as well as other inside information furnished by the city council.
The uaA issue rating reflects strong capacity of an obligor to pay the debt liability given, it may, though, be vulnerable to adverse changes in economic, financial and business conditions than debt liabilities rated uaAA and uaAAA. The "+" and "-" modifiers denote rating`s relative status within major categories. Stable Outlook shows that there are no conditions to change rating in the course of the year.
Factors supporting the credit rating
- 42% growth in budget incomes over January-September 2006 excluding transfers as compared to the similar period of 2005 and availability of significant budgetary spare funds in city`s general budget fund (UAH 38m, or 6.2% of budget incomes excluding transfers).
- Growth in a number of city`s economic development indicators over January-September 2006 as compared to the similar period of 2005, specifically the growth in industrial production by 3.2%, in retail turnover by 44.9%
- Improvement in indicators of city`s social development over January-September 2006, specifically growth in weighted average wages (up to UAH 1,230.39, which is 22.5% more than that of average of the country), growth in number of employees in line with the low level of registered unemployment (0.7% as of 1 Jan. 2006, which is 3.4x lower than that average of the country).
Factors constraining the credit rating
- Significant level of population`s current arrears for communal services and high deterioration of housing and communal facilities.
- Decrease in exports by 9.1% over January-August 2006 as compared to the similar period of the previous year, which led to 32.8% decrease in positive export turnover balance.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found in the REUTERS and BLOOMBERG information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
