OREANDA-NEWS  On 16 December Credit-Rating, a nationally recognized credit rating agency in Ukraine announced that it affirmed the long-term credit rating of uaA- (uaA minus) assigned to the city of Komsomolsk, which outlook has been revised to negative , and the long-term credit rating of uaA carrying stable outlook assigned to the city`s UAH8m bond issue due June 30, 2009.

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. A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).

Negative outlook indicates that there is a possibility to downgrade the city`s rating in the course of the year, due to rising unemployment in the city`s economy (exclusive of small businesses), which has been prompted by cancellation of mid-term strategic initiatives at Poltava GOK OJSC.

The stable outlook on series A bonds has been bolstered by high city budget`s short-term liquidity and low ratio of debt service funds to city budget revenues.

Factors maintaining the credit rating

Retention of high growth rates in revenues of city budget`s general fund.

Further growth of city`s key economic indicators during 1H2008, the majority of which calculated per capita exceeds several times those country`s averages.

Retention of positive trend in city`s key social indicators in 1H2008.

Moderate level of direct debt burden on city`s budget, coupled with low necessity in renovation of city`s fixed assets.

Factors constraining the credit rating

Anticipated decline in growth rates of city budget revenues in 2009 due to shaky environment in Ukraine`s economy.

Single-orientated city`s economy: Poltava GOK OJSC contributed to 49.1% of budget revenues exclusive of transfers in 1H2008.