IBI-Rating has assigned the credit rating and the rating of investment attractiveness of Nizhyn Territorial Community

National rating agency IBI-Rating informs on assignment of the credit rating of Nizhyn Territorial Community (hereinafter - Nizhyn TC) at uaBBB+ grade with «negative» outlook and CreditWatch listing, as well as the rating of investment attractiveness at invA- grade.

Such rating grades represent the sufficient ability of the city to pay off its financial commitments and high investment attractiveness. The notations «+» and «–» indicate 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. Indicators of socio-economic development and the effectiveness of financial policy
The economy of Nizhyn TC is characterized by a developed industry. Machine-building complex and the food industry companies play a major role. The volume of industrial production sales has increased for the past 5 years. Own income of the community grew during the entire analyzed period (2019-2022). The implementation of the budget during 2021 took place in the conditions of slowing down the growth of the country's economy due to the implementation of quarantine measures. The intensification of RF military aggression took place in the first quarter of 2022. Despite these facts, the amount of the community's own income according to the results of 2021 increased by 20.07%, and according to the results of January-March 2022 - by 7.84% compared to the same period of the previous year.
For 2021, the budget revenue plan of Nizhyn TC was fulfilled by 102.37%, including the general fund – by 102.8%, and the special fund – by 102.1%. According to the results of 2021, the share of budget own income was 70.97%, and according to the results of the first quarter of 2022 – 78.43%. According to the results of 2021, the volume of own revenues of the Nizhyn TC budget per 1 resident amounted to UAH 6.88 thousand, which is lower than the indicator for Ukraine as a whole (UAH 9.18 thousand). The indicator of budget fiscal capacity (personal income tax per inhabitant) of Nizhyn TC is also lower than the national average, which is why the horizontal equalization mechanism is applied to it - funds are transferred from the state budget to the community budget in the form of a basic subsidy. Nevertheless, the level of dependence on the leveling subsidy is insignificant.
The debt burden is low. The volume of consolidated debt as of April 1, 2022 was 2.78% of community's own income for 2021 and 2.81% of planned own income for 2022.

2. Investment potential
Nizhyn city has a well-developed transport infrastructure, which makes it the ideal transport hub of the region. Work continues on the creation of a logistics platform in the industrial zone of the city and a multimodal logistics center «Dry Port» based on «Nizhyn» airfield.
A target program for the development of small business is implemented in the community: the majority of local tax rates are below the maximum level stipulated by the legislation, which creates conditions for the development of entrepreneurship; entrepreneurs are provided with consulting and financial support; a business support center (BusinessHub) was created.
The city council pays significant attention to measures for improving energy efficiency. An energy management system has been implemented: a study of the state of the heat supply system and the possibility of converting it to alternative fuels is being carried out; the community cooperates with the Energy Efficiency Fund; there are targeted programs for stimulating the population to implement energy-efficient measures, etc. Nizhyn City Council is very active and successfully implements investment projects in cooperation with investors, including international ones.

In order to conduct the analytical research, the materials obtained from Nizhyn 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