OREANDA-NEWS. October 19, 2010. Credit-Rating, a nationally recognized credit rating agency in Ukraine has announced that it affirmed at uaA the long-term credit rating assigned to the city of Poltava (‘city’). The outlook on the rating is stable. To revise the rating the agency considered city’s social and economic, and financial indicators for 1H2010, and other inside information furnished by the city council.

An obligor or a debt liability with uaA credit rating is characterized with the HIGHLY 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.

Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.

Factors maintaining the credit rating

Retaining level of the city’s budget provisioning: the per capita estimated amount of revenues to the city budget’s general fund exclusive of transfers was recorded at UAH715.5 in 1H2010 (UAH637.2 in 1H2009) and is in excess of similar indicators of the majority of Ukrainian cities with similar administrative status and population.

The city council had no direct debts as at Jul. 1, 2010.

No concentrations in the budget revenues by major tax-payers.

Certain indicators of city’s social and economic per capita indicators exceeded similar national figures in January-June 2010, specifically the industrial production sales – by 59.8%; retail turnover of goods - by 30.7%.

Factors constraining the credit rating

Shrinking amount of receipts to the city budget in 1H2010 versus 1H2009, prompted by low pace of recovery of the city economy.

The level of monthly average salary in the city is lower than the national average accompanied by outpacing rise in the amount of salary arrears (compared with that of amount of salary) during 1H2010 under dependency of the city budget revenues upon receipts from the individual income tax (the specific gravity of this source in revenues to the city budget’s general fund exclusive of transfers was recorded at more than 75% in 1H2010).

High deterioration of city’s fixed assets, including the housing sector, utilities and transport infrastructure, which require significant investments for their renovation combined with high population’s arrears for utilities services if calculated per capita.