IBI-Rating has upgraded the credit rating and the rating of investment attractiveness of Ternopil city territorial community


National rating agency IBI-Rating informs on upgrading the credit rating of Ternopil city territorial community (CTC) to uaA grade with an «evolving» outlook and the rating of investment attractiveness to invA+ grade.

Such rating grades represent high ability of the municipality to pay off its financial commitments and high investment attractiveness. The «evolving» outlook, with the highest probability, implies of rating changes during the year. Currently, such a forecast applies to all subjects of the municipal sector rating. It is due to increased uncertainty regarding the actions of authorities and entities in case of aggravation of the epidemiological situation in Ukraine and the world. The notation «+» indicates an intermediate rating category relative to the main category.

The upgrading of credit rating is due to the positive dynamics of most indicators of socio-economic development (sales of industrial products, retail trade, foreign trade turnover, commissioning, employment, etc.), as well as own budget revenues increasing, despite declining enterprises activities because of quarantine restrictions. Expected growth of community’s budget financial base due to the changes in tax legislation (draft law №5600 was adopted in November 2021) is additional positive factor.

The upgrading of rating of investment attractiveness was due to changes in legislation aimed at strengthening the operational capacity of local governments in working with investors, as well as the active work of local authorities to create favorable conditions for entrepreneurship and investment climate.

Were taken into account:

1. The structure of the economic complex and the dynamics of key indicators

The community has a developed and diversified industrial complex. The most developed industries of Ternopil СTC are: food, light, chemical, machine-building and pharmaceutical industries. The values of a number of socio-economic development indicators per capita are higher than in Ukraine as a whole. In particular: the volume of retail trade, the volume of commissioning of housing; the share of the working population and its level of employment. At the same time, some indicators of economic development are lower than in Ukraine as a whole (sales of industrial products, foreign trade in goods, the level of average monthly wages).

2. The level of community budget support and debt burden

Ternopil СTC has an acceptable level of budget security: the amount of budget revenues per capita according to the results of 6 months 2021 amounted to UAH 4.46 thousand (against UAH 4.13 thousand in Ukraine as a whole). Despite the application of quarantine restrictions, the community's own budget revenues in the first half 2021 increased by 28.55% compared to the same period in 2020. The budget surplus for the first half of 2021 amounted to UAH 209.32 million.

Ternopil CTC's budget has a sufficient level of liquidity. According to the results of the budget execution for 6 months of 2021, the ratio of the balances on the general fund accounts to the general fund expenditures was 19.75%, for the special fund the liquidity ratio was 28.48%.

Ternopil CTC's budget has a low level of direct and guaranteed debt burden (as of July 1, 2021: 1.89% and 5.34% of the planned own revenues of the community for 2021, respectively). The size of the prospective consolidated debt (taking into account the sample of the total volume of planned loans) is significant, in turn, the pressure on the budget is somewhat mitigated by a long lending period with a uniform repayment schedule and low interest rates.

3. Business development and investment attraction potential

Ternopil CTC has significant agro-industrial and tourist potential due to the presence of fertile soils, water resources and green areas for recreation. The community has sufficient land resources and real estate that can be used for business activities.

Local authorities pursue transparent and efficient industrial and investment policies aimed at developing small businesses, supporting local producers and expanding international cooperation. The community has a significant number of enterprises with foreign investment, as well as new representative offices of foreign enterprises are regularly opening. Thus, in the first half of 2021, a representative office of the Synergy Universe group of companies was opened and an agreement was reached to open a Monks International plant in the city (an agreement on long-term lease of production space was signed).

One of the most important measures of the local economic development plan is the work on the arrangement of the Ternopil Industrial Park. In 2021, the winner of the competition to select the manager of the industrial park company was «Logistics Enterprise» of the Ternopil City Council».

The promotion of the investment potential of the community is taken care of by a special subdivision of the executive power of the Ternopil city ATC «City Strategic Development Department». The advantage of the community in terms of attracting investment is the presence of successful experience in the implementation of infrastructure projects, including with involving of international investors.

In order to conduct the analytical research the materials obtained from Ternopil 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