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IBI-Rating has affirmed the credit rating and the rating of investment attractiveness of Odesa city

16.12.2019
National rating agency ІВІ-Rating informs on affirming of a credit rating of Odesa at uaА grade with a «stable» outlook, and the rating of investment attractiveness at invAA- grade.

Such rating grades represent the excellent investment attractiveness and strong ability of the city to pay off its financial commitments. The «stable» outlook, with the highest probability, implies immutability of the rating on the horizon for 12 months.

Were taken into account:


1. The structure of the economic complex of the city and the dynamics of key indicators
The economy of Odesa is diversified, what reduces the impact of adverse commercial changes in certain industries on its development and ensures stable revenues to the city budget. In the first half of 2019, a further increase of the main indicators of socio-economic development was observed. In January-June 2019, compared to the same period of the previous year, have grown such indicators as: the amount of industrial products sold grew by 25.6% - up to UAH 16.6 billion, the volume of housing commissioning increased in 2.3 times - up to 237.0 thousand m², retail turnover by 22.1% - up to UAH 19.9 billion, foreign trade turnover by 13% - almost up to USD 1 billion. Most per capita indicators continue to respond or exceed the national average.

2. Competitive advantages and disadvantages in comparison with other cities of the country
Odesa is one of the largest logistics hubs in Ukraine. The city has a large number of educational institutions in different profiles and developed service, communal and social infrastructure. A significant number of operating enterprises, the status of one of the largest tourist centers in the country and more than 1 million people of the population provides high domestic demand for goods and services and creates a good basis for the further development of the manufacturing sector and the transport industry. At the same time, the cost of labor resources is lower compared to the capital. Active actions aimed to attract local and foreign investments, as well as a policy of maximum transparency in relation to business by local authorities, has a positive effect on the investment climate in the region, as well as on the economic, human and social potential of the city. Key government authorities of the region are localized in Odesa.

3. Efficiency of financial policy and budget indicators
In January-June 2019, the total budget revenues of Odesa amounted to UAH 5.6 billion which is in 4% higher than in the corresponding period last year, the amount of own income increased by 10.9%. The level of fiscal security continues to exceed the national average. According to the results of the first half of 2019, the city budget was executed with a surplus of UAH 279.7 million.

4. The sensitivity of the budget and the city economy to the impact of negative factors
The modernization of infrastructure, transport and housing requires additional funding. However, the city is servicing its financial obligations under the terms of the contracts. According to the results of the first half of 2019, the financial liabilities of the Odesa City Council decreased by UAH 60.7 million, or in 5.0%, amounting to UAH 1.2 billion as of 01.07.2019. The forecast for the consolidated debt load on city budget revenues in 2019 (42%) is at an acceptable level. Given the long-term nature of most loans and a convenient interest payment schedule, their servicing will not exert significant pressure on the budget revenues, at least with the existing income levels. According to the Agency, the impact of negative factors on the economy and the financial viability of the city remains moderate - the city’s economic complex is well diversified and sufficiently adapted to the risks posed by the military conflict in eastern Ukraine and the introduction of trade restrictions between Ukraine and the Russian Federation.

In order to conduct the analytical research the materials obtained from Odesa city have been used, including: indicators of the social and economic development, statistical data, treasury statements, program materials, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

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