Moody's ups view of 3 Ukraine cities

Moody's Investors Service said it changed to stable from negative the outlooks on the B2 foreign- and local-currency issuer ratings of the Ukrainian cities of Kyiv, Kharkiv and Berdyansk.

The outlook changes follow Moody's decision to change to stable from negative the outlook on the Ukrainian government's B2 ratings.

The stable outlooks also reflect recent improvements in the stand alone credit profiles of Ukrainian municipalities, having been supported by an economic recovery at both the local and national levels, the agency said.

Moody's said it expects that Kharkiv's and Berdyansk's operating margins will remain marginally positive, while tax revenue is expected to increase with an economic recovery.

Kyiv's operating balances were seriously impaired by an 18% decline in operating revenue in 2009 and growing transfers to the central government, the agency said, but the city's operating revenue has already started to recover in 2010.

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