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Placed: 04.12.2015 14:32:34

UCRA upgraded the credit rating of Odessa

Ukrainian credit rating agency (UCRA) upgraded the long-term credit rating of the city of Odessa from uaA to uaA+ with a «stable» outlook

On November 24th Ukrainian credit rating agency (UCRA) upgraded the long-term credit rating of the city of Odessa from uaA to uaA+ with a “stable” outlook. In order to update the rating, UCRA used the reports on fulfillment of the local budget for the first 6 months of 2015, indicators of social and economic development of the city, as well as other information provided by the municipality of Odessa in the rating process.


Odessa is administrative center of Odessa region, an important industrial, scientific, financial, transport, tourist and cultural center on the territory of Ukraine. Odessa is the third largest city in Ukraine with the population of 1,012.3 thousand people as of July 1, 2015. The city demonstrates a high level of social and economic development; it has high potential in the sphere of industrial production, science, health-resort services as well as well-developed transport, utilities and social infrastructure. The largest taxpayers contributing to the city budget for the first 6 months of 2015 were companies from transport and communication sector, financial institutions, public sector institutions, industrial enterprises, construction and trading companies. Despite challenging current economic and financial situation in Ukraine, for the first 6 months of 2015 the revenues of the city budget increased for the majority of revenue sources and the level of fulfillment of the annual plan was high.


The credit rating of Odessa is supported by the strong growth of the budget revenues (by 146.1% for the first 6 months of 2015) and the improvement of liquidity indicators, mainly resulting from positive impact of the budgetary decentralization reform. The city benefits from diversified local economy and low level of concentration of revenues from the main taxpayers, as well as from high level of budgetary provision: for the first 6 months of 2015 the volume of revenues of Odessa (excluding transfers) per capita was higher than the average for local governments (by 8.4%) and higher than revenues of the other Ukrainian cities comparable to Odessa. UCRA notes that the city authorities have demonstrated an effective policy of the local debt management resulting in improvement of the scope and structure of the local debt and in reducing of the debt burden for the city budget.


The credit rating of Odessa is restricted by the significant capital investment needs for renovation of the urban infrastructure and housing. UCRA also takes into account the challenging economic situation in the country and the continuation of the armed conflict in some of its regions, which negatively affect the growth potential and the solvency of economic entities.


The “stable” rating outlook indicates that a rating change is unlikely for the next 12 months.



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