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04.05.2007
Credit rating assigned to bond issue by the city of Zaporozhye upgraded to uaA
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today upgraded to uaA from uaBBB+ (uaBBB plus) the long-term credit rating assigned to bond issue by the city of Zaporozhye (Issuer` or city`) for the amount of UAH 75m with the 5-year original maturity. In the course of the rating`s upgrade procedure the agency took into consideration Issuer`s economic and financial performance indicators for 2006 as well as other inside information furnished by the city council.
The uaA issue rating reflects strong capacity to pay the issue given, it may, though, be more vulnerable to adverse changes in economic, financial and business conditions than issues rated uaAA and uaAAA.
In the course of the rating`s upgrade procedure the agency took into account the following factors:
- The Issuer has a positive experience of debt discharge in line with the low direct debt burden (8.9% as of Jan. 1, 2007)
- Positive tendencies of labour market development during 2006 compared to 2005, in fact the officially registered unemployment decreased to 0.7%, which is 3.9x lower than that of the country`s weighted average, increased number of employees and average salary by 26.6% - up to UAH 1,222.4, which is 17.4% higher than that average of the country.
- Growth of 2006 key economic indicators, specifically the heightened sales of industrial production, the volume of attracted investments into fixed capital, volume of external goods` turnover, volume of retail turnover, volume of direct foreign investments.
Factors constraining the credit rating
- City`s dependency upon attracted funds, high deterioration of main funds, including utility facilities, and necessity in capital investments into renovation of city`s utility infrastructure.
- High pollution of the environment, which negatively affect the city`s social sphere.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found in the REUTERS, BLOOMBERG and FTN MONITOR information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
