S&P affirms Kyiv

Standard & Poor's said it affirmed the City of Kyiv's BB- long-term and B short-term foreign-currency ratings, BB long-term and B short-term local-currency ratings and uaAA Ukraine national scale rating.

The outlook remains negative.

"The rating reflects Kyiv's limited fiscal flexibility, due to central government control of major revenues, and evolving interbudgetary relations," S&P credit analyst Boris Kopeykin said in an agency rating. "The rating is also constrained by significant expenditure pressures, relatively high foreign exchange risk related to bullet debt repayments, and the need for further improvements in management sophistication and transparency."

The agency said the rating is supported by the city's position as the economic, financial and cultural center of Ukraine and by its sound liquidity levels.

The negative outlook mirrors the outlook on the sovereign, as Kyiv's economic and budget performances are closely linked to the situation in the country and, therefore, the rating and outlook on the city are constrained by those on Ukraine, S&P said.

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