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Rating agency «IBI-Rating» has affirmed the credit rating of Cherkassy city at uaВВВ grade

24.04.2017
Rating agency «IBI-Rating» informs on affirming of the credit rating of Cherkassy city at uaBBB grade, keeping the «stable» outlook.

The credit rating of Cherkassy city reflects its importance as a regional center, diversified economic complex of the city, which contributes to the rapid recovery of sources of filling of the city budget revenues, as well as to an increase in budget revenues.

The development of Cherkassy city in 2016 continued to be influenced by the overall situation in the country's economy, which was in the stage of recession. Despite this, for the second consecutive year the economy of the city demonstrated a gradual recovery, accompanied by an increase in the industrial output sold, the volume of capital investments assimilated and foreign trade turnover.

This trend allowed Cherkassy city to improve the main indicators of social and economic development, most of which are either equal to or exceeding average values for the country per capita, as well as to increase revenues to the local budget.

There is a moderate level of budget provision of the city, which in 2016 exceeded the average indicator in Ukraine and a low indicator of direct debt burden on the city budget revenues, which in 2016 decreased to 9.2% due to the timely repayment of domestic local loan bonds in the amount of UAH 60.0m, at a simultaneous increase in revenues to the budget. Accordingly, the consolidated load indicator decreased by 19.8 p.p. and, as at 31.12.2016, was 49.3%. The consolidated debt of Cherkassy City Council is mainly formed by obligations under guarantees for loans of international financial organizations granted to public utilities in foreign currency, rendering the city budget revenues sensitive to currency fluctuations.

By results of 2016, the amount of Cherkassy city budget revenues grew as compared with 2015 by 1.4 times and amounted to UAH 2 250.1m, which was facilitated by an increase in tax revenues (+ 47.6%) and non-tax revenues (+34. 1%), revenues from capital transactions (+ 67.1%), as well as official transfers (+ 30.5%). In the mentioned period, Cherkassy city budget was consolidated with a surplus in the amount of UAH 7.6m versus 55.4m in 2015.

A positive impact on the credit rating may have, as follows: increased revenues of Cherkassy city budget and improvement of most indicators of social and economic development in the city per capita. A negative impact on the credit rating may have, as follows: decreased budget revenues indicators, reduction in liquidity, a substantial increase of debt obligations, deterioration of the borrowings market conditions or limiting of the access to it for municipal formations.

In order to conduct the analytical research the materials obtained from Cherkassy city were used, including: indicators of social and economic development, materials of statistical bulletins; annual treasury statements, program materials, other necessary internal information, as well as the information from the public sources, which the Rating agency considers reliable.


Municipal department

For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua