OREANDA-NEWS  On 10 September Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it assigned a long-term credit rating of uaA to the city of Energodar (`city`) and to its upcoming issue of coupon bonds. The amount of the issue is to be UAH10m due in 2013. In the course of the rating procedure Credit-Rating considered city`s social-economic and financial indicators for 2003-2007 and 1Q2008 as well as other inside information furnished by the city council.

An obligor or a debt liability with uaA credit rating is characterized with the HIGH STRONG creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is susceptible to adverse changes in commercial, financial and economic conditions.

Factors maintaining the credit rating

High growth rates of the city budget`s general fund exclusive of grants over the past 3 years, specifically the revenues exceeded by 22.2% in 2005, by 23.3% in 2006 and by 33.1% in 2007 the indicators in the corresponding budget periods.

High city budget liquidity in the general fund (36.3% as of Apr. 1, 2008) coupled with no city budget`s dependency in 2003-2007 and 1Q2008 upon loans from general treasury account

Certain indicators of the city`s economic development in 2007 (calculated per capita) exceed the respective country`s indicators, in fact the industrial production sales - by 7.7x, and fixed capital investments - by 1.8x.

The city`s social development indicators improved during 2003-2007, specifically the monthly average salary rose to UAH2,259.2, which is 67.2% higher than the country`s average accompanied by decline in the rate of unemployment to 1.8%, which is 0.6 p.p. lower than the country`s average.

The population`s age rate is lower as compared to other Ukrainian cities, which positively affect revenue side of the city budget`s general fund.

Factors constraining the credit rating

The city`s economy is orientated in a single sector and the city budget is dependant upon performance of Zaporizhzhia Nuclear Power Plant of NAEK Energoatom and Zaporizhzhia Thermal Power Plant of Dneproenergo OJSC, which formed over 70% of revenues in the city budget`s general fund exclusive of grants.

Significant volume of the planned growth in the direct and guaranteed debt of the city council in case the bond issue is placed in full and provided guarantees by the utility company Production Combine Teplo-vodokanal on the lending of the joint project with the European Bank for Reconstruction and Development.