Moody’s upgrades Kharkiv

Moody’s Investors Service said it upgraded the city of Kharkiv’s foreign- and local-currency ratings to Caa3 from Ca.

The outlook is stable.

The main driver of the city’s upgrade is the decrease in systemic risk, given the Ukrainian government’s improved credit profile, Moody’s said.

The upgrade also reflects the improvement in Ukraine’s credit profile, which has direct implications for the ratings of the city given its institutional, financial and macroeconomic linkages with the central government, the agency said.

The Ukrainian government exerts a wide control over the Ukrainian cities’ finances, Moody’s said, which are exposed to possible reductions in state funding.

Despite its adequate financials, the agency added, the ratings remain under pressure from the significant systemic risks.

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