OREANDA-NEWS. October 29, 2009. Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it placed on Rating Watch List (‘RWL’) the long-term credit ratings uaBBB+ (uaBBB plus) of the city of Lutsk (‘city’) and its issues of coupon bonds (series 1-A, 1-B, 1-C, 1-D, 1-E, 1-F). The outlook on the rating has been changed to negative.

This rating action has been prompted by poor execution of budget’s annual revenue plan in 1H2009 and budget’s eroded liquidity. Moreover, we foresee further plunge and subsequent decline in prices for land plots and communal property, which are weighed by national-wide adverse economic environment. This will have impact on amounts of revenues to the development budget and may impair accumulation of budget funds.

The removal of the ratings from the RWL and their further revision is contingent upon city’s timely and full meeting commitments on the bond obligations.

An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is affected by 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 rating in the course of the year, on condition that negative tendencies are retained and current risks are realized.

The Rating Watch List is intended to inform financial market participants about possible changes of ratings in short-term prospective. The rating placed on RWL denotes that Credit-Rating is currently considering its change as a result of events or ongoing trends, which may negatively affect creditworthiness of a rating’s bearer.

Information on all credit ratings assigned in accordance with the National Rating Scale may be found in REUTERS and BLOOMBERG information systems.