Moody's downgrades Kyiv, Kharkiv

Moody's Investors Service said it downgraded the foreign- and local-currency ratings of the Ukrainian cities of Kyiv and Kharkiv to Caa2 from Caa1 and changed the outlook to negative. This concludes the review for downgrade that began in September.

The agency said the main driver for the decision on these ratings was the deterioration of the Ukrainian government's credit profile, as reflected by Moody's recent downgrade of the sovereign's Caa1 bond rating to Caa2 with a negative outlook. The deterioration in Ukraine's credit profile has direct implications for the ratings of Kyiv and Kharkiv given their institutional, financial and macroeconomic linkages with the central government, Moody's said.

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