IBI-Rating has upgraded the credit rating of Vinnytsia city to uaА- grade

IBI-Rating informs on upgrading of the credit rating of Vinnytsia city from uaBBB to uaА- grade, preserving the «stable» oulook.

Upgrading of the credit rating of Vinnytsia city was due to a steady increase in revenues to the city budget over recent years, efficient policy of the city authorities of the local debt management, expanded boundaries of the city by 1.6 times due to areas of village councils, which were located outside settled areas, providing additional opportunities to increase budget revenues and economic development of the city. The grade of the credit rating of Vinnytsia city is due to importance of the city as a regional center of Ukraine, highly diversified economic complex of the city, which contributes to the rapid recovery of revenue sources of the city budget, as well as a moderate level of consolidated debt burden on the city budget given the regular debt servicing and repayment schedule.

Development of Vinnytsia city in 2015 was under the influence of the overall situation in the country. Despite the reduction in foreign investment volumes, the city demonstrated growth of volumes of assimilation of capital investments, industrial output sold in monetary terms, export of products and housing commissioned. Measures on decentralization of budgetary relations and delegation of powers to cities to collect certain state taxes, duties allowed Vinnytsia city to increase budget revenues by 25% as compared with 2014, including tax revenues (an increase by 53%), revenues from capital transactions (an increase by 2.5 times). Moreover, the increase in revenues occurred by most budget items. The indicator of budgetary provision of the city remains close to the average value for local budgets in the country. Certain indicators of social and economic development of Vinnytsia city are at a lower level than the national average level, additionally constraining the revenue side of the city budget. Taking into account highly obsolete fixed assets, including housing stock, engineering and transport infrastructure facilities, Vinnytsia city makes significant investments in local infrastructure including attracting borrowed funds.

A positive impact on the credit rating may have, as follows: a substantial increase in Vinnytsia city budget revenues and improvement of most indicators of social and economic development of the city per capita. A negative impact on the credit rating may have, as follows: decline in performance indicators of budget revenues, reduced liquidity, increased debt obligations, deteriorating conditions in the capital market or a limited access to it for municipal formations.

Department of municipal ratings area
For more information please contact:
Press service of IBI-Rating
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