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IBI-Rating has updated the credit rating and the rating of investment attractiveness of Pryluky City Territorial Community
14.02.2023
National rating agency IBI-Rating informs on affirming of the credit rating of Pryluky City Territorial Community (hereinafter – Pryluky CTC) at uaA– grade with «negative» outlook and CreditWatch listing, as well as the rating of investment attractiveness at invA– grade.
Such rating grades represent the high ability of the city to pay off its financial commitments and high investment attractiveness. The notation «–» indicates an intermediate rating category relative to the main category. The negative outlook indicates a high probability of credit rating downgrade during the year. The negative outlook and Credit Watch listing are due to the deterioration of operating conditions and increased uncertainty about the prospects for economic development against the backdrop of prolonged hostilities on the territory of Ukraine caused by RF aggression. Currently, this outlook applicable by agency to all subjects of rating.
Were taken into account:
1. The structure of the economic complex and effectiveness of financial policy
Industrial production is the leading branch of the economy, which ensures the employment of the able-bodied population and the filling of the budget of Pryluky CTC. The largest share of the volume of products sold is concentrated in enterprises of the processing industry, among which the production of food products, beverages and tobacco products prevails. The largest share of the volume of realized production is concentrated in the enterprises of the processing industry, among which the production of food products, beverages and tobacco products prevails. For 9 months of 2022, the revenues of the budget of Pryluky CTC amounted to UAH 455.0 million (+22.6% compared to the same period in 2021).
According to the results of 9 months of 2022, community’s own budget revenues amounted to UAH 378.13 million (+31.87% or +UAH 91.38 million compared to the same period in 2021). According to the results of 9 months of 2022, the plan for receipts in the general fund of community’s budget was fulfilled by 107.2%, including the plan for own revenues – by 108.8%, and by official transfers – by 100%. The indicator of the fiscal capacity of the budget (personal income tax per inhabitant) of Pryluky CTC is higher than the national average, which is why the horizontal equalization mechanism is applied to it - the funds are transferred from the community budget to the state budget in the form of a reverse subsidy. The volume of the reverse subsidy for 9 months in 2022 amounted to UAH 1.86 million (against UAH 12.37 million in 9 months of 2021).
Surplus of community’s budget for 9 months 2022 amounted to UAH 107.93 million (against the surplus of UAH 56.07 million for 9 months of 2021). At the same time, the surplus of the general fund is UAH 114.12 million and the deficit of the special fund is UAH 6.18 million.
The community budget has a certain concentration on taxpayers. The amount of taxes paid by TOP-20 taxpayers for 9 months. 2022, amounted to UAH 228.69 million (61.97% of the volume of tax revenues of the community budget).
As of 01.10.2022, Pryluky CTC has no outstanding loan guarantees provided by the local council, outstanding loans of communal enterprises, unclosed leasing agreements of communal enterprises
2. Investment potential
Pryluky CTC is rich in combustible minerals (oil, gas, peat), construction raw materials (sand, clay) are bischophyte, the aqueous solution of which has valuable medicinal properties. Small and medium-sized businesses have a significant impact on the community budget. The majority of local tax rates are below the maximum level stipulated by the legislation, which creates conditions for the development of entrepreneurship.
The city council actively works in the direction of communications with potential investors. With the aim of attracting methodical and technical assistance, extrabudgetary funds for community development and creating a positive image of the city of Pryluky, it is a participant in international and national programs and initiatives of various levels. The community has experience in successfully implementing investment projects with the participation of international investors. In the second half of 2022, the city council successfully repaid the loan of the Northern Environmental Financial Corporation (NEFCO), which was attracted to finance the implementation of measures within the framework of the program «Increasing the energy efficiency of budget facilities (educational institutions) and external lighting systems of Pryluky». The total amount of debt obligations under the contract was UAH 11,990 thousand.
In order to conduct the analytical research, the materials obtained from Pryluky CTC 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
Such rating grades represent the high ability of the city to pay off its financial commitments and high investment attractiveness. The notation «–» indicates an intermediate rating category relative to the main category. The negative outlook indicates a high probability of credit rating downgrade during the year. The negative outlook and Credit Watch listing are due to the deterioration of operating conditions and increased uncertainty about the prospects for economic development against the backdrop of prolonged hostilities on the territory of Ukraine caused by RF aggression. Currently, this outlook applicable by agency to all subjects of rating.
Were taken into account:
1. The structure of the economic complex and effectiveness of financial policy
Industrial production is the leading branch of the economy, which ensures the employment of the able-bodied population and the filling of the budget of Pryluky CTC. The largest share of the volume of products sold is concentrated in enterprises of the processing industry, among which the production of food products, beverages and tobacco products prevails. The largest share of the volume of realized production is concentrated in the enterprises of the processing industry, among which the production of food products, beverages and tobacco products prevails. For 9 months of 2022, the revenues of the budget of Pryluky CTC amounted to UAH 455.0 million (+22.6% compared to the same period in 2021).
According to the results of 9 months of 2022, community’s own budget revenues amounted to UAH 378.13 million (+31.87% or +UAH 91.38 million compared to the same period in 2021). According to the results of 9 months of 2022, the plan for receipts in the general fund of community’s budget was fulfilled by 107.2%, including the plan for own revenues – by 108.8%, and by official transfers – by 100%. The indicator of the fiscal capacity of the budget (personal income tax per inhabitant) of Pryluky CTC is higher than the national average, which is why the horizontal equalization mechanism is applied to it - the funds are transferred from the community budget to the state budget in the form of a reverse subsidy. The volume of the reverse subsidy for 9 months in 2022 amounted to UAH 1.86 million (against UAH 12.37 million in 9 months of 2021).
Surplus of community’s budget for 9 months 2022 amounted to UAH 107.93 million (against the surplus of UAH 56.07 million for 9 months of 2021). At the same time, the surplus of the general fund is UAH 114.12 million and the deficit of the special fund is UAH 6.18 million.
The community budget has a certain concentration on taxpayers. The amount of taxes paid by TOP-20 taxpayers for 9 months. 2022, amounted to UAH 228.69 million (61.97% of the volume of tax revenues of the community budget).
As of 01.10.2022, Pryluky CTC has no outstanding loan guarantees provided by the local council, outstanding loans of communal enterprises, unclosed leasing agreements of communal enterprises
2. Investment potential
Pryluky CTC is rich in combustible minerals (oil, gas, peat), construction raw materials (sand, clay) are bischophyte, the aqueous solution of which has valuable medicinal properties. Small and medium-sized businesses have a significant impact on the community budget. The majority of local tax rates are below the maximum level stipulated by the legislation, which creates conditions for the development of entrepreneurship.
The city council actively works in the direction of communications with potential investors. With the aim of attracting methodical and technical assistance, extrabudgetary funds for community development and creating a positive image of the city of Pryluky, it is a participant in international and national programs and initiatives of various levels. The community has experience in successfully implementing investment projects with the participation of international investors. In the second half of 2022, the city council successfully repaid the loan of the Northern Environmental Financial Corporation (NEFCO), which was attracted to finance the implementation of measures within the framework of the program «Increasing the energy efficiency of budget facilities (educational institutions) and external lighting systems of Pryluky». The total amount of debt obligations under the contract was UAH 11,990 thousand.
In order to conduct the analytical research, the materials obtained from Pryluky CTC 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