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

30.12.2021
National rating agency ІВІ-Rating informs on upgrading of credit rating of Vinnytsia city territorial community (further Vinnytsia CTC) to uaА+ grade with an «evolving» outlook and investment attractiveness rating to invАА grade.

Such rating grades represent the excellent investment attractiveness and strong ability of the municipality to pay off its financial commitments. The «evolving» outlook, with the highest probability, implies of rating changes during the year. Currently, such rating outlook is applied to all municipal sector clients of the Agency. It is due to increased uncertainty regarding the actions of authorities and business 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 growth of a number of socio-economic development indicators, reduction of the debt burden and increase of own budget income, despite the decrease in the activity of enterprises, that was caused by 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. Indicators of socio-economic development
The economy of Vinnytsia CTC is characterized by diversified industry, developed service, social, communal and transport infrastructure. A significant part of the indicators of socio-economic development per capita exceeds the figures for Ukraine as a whole, in particular: revenue from sales of industrial products, retail sales, commissioning, foreign trade in goods and services.

2. Efficiency of financial policy

The community's own income for the first half of 2021 increased by 18.83% compared to the same period last year, despite the fact that the budget execution took place in a slowdown country's economy due to quarantine measures. The share of own income in January-June was 80.31% (against 75.95% in the same period in 2020). The volume of own Vinnytsia CTC’s budget income per capita amounted to UAH 4.69 thousand in the first half of 2021, that is higher than the figure for Ukraine as a whole (UAH 4.13 thousand).
According to the results of the first half of 2021, the budget of Vinnytsia CTC showed a sufficient level of liquidity: the ratio of balances on general fund accounts to general fund expenditures was 11.43%, the special fund liquidity ratio was 36.81%. The budget of the Vinnytsia city territorial community for 6 months of 2021 was executed with a surplus of UAH 517.1 thousand. Debt burden is moderate. As of July 1, 2021, the city council's direct debt was 3.68%, and the consolidated debt - 10.23% of Vinnytsia CTC’s budget planned own income for 2021.

3. Community investment potential

The community has a favorable geographical position at the intersection of major Ukrainian and European transport corridors, as well as a developed industrial, commercial and business infrastructure. The City Council pays great attention to the support and development of small business and innovation activities, including through the creation of 3 industrial parks and the municipal enterprise «Vinnytsia municipal center of innovation». The process of creating the first in Ukraine municipal innovation and technology park «Crystal» is underway.
The development of business is also facilitated by the availability of vacant land and communal real estate for sale and lease. Vinnytsia city is included in the list of cities with the most favorable business climate and effective economic management - it took the 4th place for 2019-2020 and the 5th place for 2021in the ranking of competitiveness of Ukrainian cities. The community has significant achievements in the area of energy efficiency, as well as great experience in investment projects implementing with international organizations.

In order to conduct the analytical research, the materials obtained from Vinnytsia city TC have been used, including: socio-economic development indicators, statistics, treasury reports, program materials, other necessary internal information, as well as information from open sources, which the Rating agency considers reliable.

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