Print

IBI-Rating has affirmed the credit rating of the city of Ternopol at uaBBB grade

30.11.2015
IBI-Rating has affirmed the credit rating of the city of Ternopil at uaBBB grade, keeping the «stable» outlook.

The affirmed credit rating grade of Ternopol city is due to its importance as a regional centre, a high diversification of the revenue side of the budget and a moderate level of budgetary provision, which is close to the average for local budgets, as well as a low level of the direct debt burden on the budget revenues.

The development of Ternopol city in the I half of 2015 was influenced by the general situation in the country. Ternopol city, despite the migration outflow of population, the reduction of volumes of foreign direct investments, demonstrated an increase in monetary terms of the volume of industrial production, construction works, internal and external trade turnover. Most of the indicators of social and economic development of the city in the I half of 2015 remained below the national average, limiting the revenue side of its budget to some extent. The measures aimed at decentralizing of budgetary relations and delegating to cities of the authority to collect certain government taxes and levies as well as an increase in the volume of the privatized communal property allowed Ternopol city to increase the volumes of tax revenues by almost 20% and of non-tax revenues by 62%, respectively, and the budget revenues by almost 40%, as compared to the similar period of the last year. Moreover, the increase in revenues occurred for most budget items.

The city retained a high level of depreciation of fixed assets, including the housing fund, utilities and transport infrastructure, which causes the necessity of significant capital investments in the local infrastructure, for which the sources of funding, including those in the perspective, will be funds of international financial institutions.

A positive impact on the credit rating of the city may have as follows: the growth of Ternopol city budget revenues and improvement of most of the indicators of social and economic development of the city per capita. A negative impact on the credit rating of the city may have as follows: deterioration in the performance indicators of the budget revenues, reduced liquidity, a significant increase in debt obligations, deterioration of the loan market or a restricted access to it for municipalities.

In order to carry out the analytical research the materials received from Ternopol city were used, including the annual Treasury statements for the I half of 2015, indicators of social and economic development and the city's budget for the I half of 2015, other necessary internal information as well as the information from the open sources, which the Rating agency considers reliable.

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