Moody's: Kharkiv bond B2

Moody's Investors Service said it assigned a provisional B2 first-time global-scale local-currency rating to the City of Kharkiv's hryvnia-denominated bond issuance totaling UAH 99.5 million.

The planned fixed-rate senior unsecured bond will be issued in November and due in 2014.

The proceeds will be used to fund Kharkiv's construction needs in 2011 and 2012, Moody's said.

The city's global-scale local- and foreign-currency issuer ratings of B2 reflect the rigidity of key items in Ukrainian municipal budgets, a recent recessionary-linked deterioration in the city's operating balances and its weak liquidity position, Moody's said.

This is partly offset by the city's low debt exposure with minimal interest costs and the relative resilience of the city's tax base to economic cycles, the agency said.

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