Positive rating outlook

Rating agency IBI-Rating reports Odesa City Council made early hryvnia loan repayment amounting to 49,68 mln hryvnias issued by Erste Group Bank AG and PJSC Fidobank. These credit assessments prove high creditworthiness of the municipal body: the city of Odesa has been assigned the credit rating of uaA-, with positive rating outlook. Please note that the credit rating of А category is assigned to a borrower with high solvency as compared to other Ukrainian borrowers.

In the rating agency’s opinion, early loan repayment made by the city authorities lies within the debt management policy framework. In undertaking these actions, the city authorities attempted to lower tax burden on the municipal budget, thus releasing funds necessary for covering other expenses. In particular, hryvnia loan repayment amounting to 49,68 mln hryvnias allowed saving budget funds making up 4,7 mln hryvnias, otherwise they could be used to pay the interest on a loan.

Similar steps to recover the debt were undertaken by the city authorities in the first half of 2013, when Odesa city council paid 5 mln Swiss francs and 41,2 mln hryvnias as a part of foreign loan, what helped save budget funds in the amount of 3,8 mln hryvnias.

IBI-Rating believes Odesa city’s loan repayment can give investors some reasons for being confident in Odesa’ credit reliability, especially in today’s economic conditions ensuing from political instability. The amount of reduction in debt burden will be accounted for, while making next regular credit assessment of the city’s rating. The advantage of this positive rating outlook is that the credit rating can be reviewed in case the rating agency receives sufficient evidence that the city authorities continue to further implement its debt management policy, to fulfill the objectives of the annual budget, facilitate socio-economic development and tries to improve the economic situation in Ukraine.