IBI-Rating has assigned credit rating of Kherson city territorial community and planned bond issue

National rating agency ІВІ-Rating informs on assignment of the credit rating of Kherson city territorial community and planned bond issue at uaА– grade with an «evolving» outlook.

Such rating grades
reflect high creditworthiness and sensitivity to adverse commercial, financial and economic conditions. 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.

Were taken into account:

1. The structure of Kherson CTC’s economic complex and the value of socio-economic development indicators

The main branches of Kherson CTC are the food industry, mechanical engineering, metalworking, and the chemical industry. There are also 51 agricultural enterprises operating on the community’s territory.

The share of the working-age population and the level of employment of the population (based on the number of full-time employees) as of July 1, 2021, is higher than in Ukraine as a whole.

The volume of sales of industrial products per 1 person according to the results of 6 months 2021 is UAH 22.04 thousand (UAH 39.46 thousand in Ukraine as a whole).

The development of small and medium-sized businesses has great importance for Kherson CTC’s economy. The number of small enterprises is more than 90% of the total number of enterprises operating on the territory of the community. The community is actively developing trade: the volume of retail turnover for 6 months 2021 per 1 inhabitant of the community is UAH 20.33 thousand, which is significantly higher than in Ukraine as a whole (UAH 11.5 thousand).

The community enterprises are actively developing foreign economic activity: the balance of trade in goods is positive, and the coefficient of export coverage of imports is increasing annually. But so far the foreign trade turnover of goods per 1 inhabitant is less than in Ukraine as a whole.

2. The level of community’s budgetary provision and the debt burden

Kherson CTC is characterized by a high level of budgetary provision: the volume of its own income per 1 community inhabitant, according to the results of 2018-2020 and the first half of 2021, exceeds the value of this indicator for Ukraine as a whole.

The community's budget is characterized by a sufficient level of liquidity and a moderate debt burden: as of July 1, 2021, the direct debt burden was 3.23% of community's planned budget revenues for 2021, the consolidated debt burden – 11.07%. In turn, due to the issuance of bonds and obtaining loans (including from foreign investors), a significant debt burden increase is expecting in the future. At the same time, risks are partially minimized due to the long-term maturity of external loans, the presence of a schedule for the gradual repayment of loans and the absence of peak loads on payments.

3. Sensitivity of Kherson CTC’s budget and economy to the impact of negative factors

The community has a diversified economy and moderate budget sensitivity to the activities of individual enterprises and industries: revenues from the TOP 20 taxpayers in 2019 amounted to 17.14% of the total tax revenues, in 2020 – 18.16%.

In order to conduct the analytical research the materials obtained from Kherson City Council 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