Moody's rates Krasnodar Ba2/Aa2.ru

Moody's Investors Service said it assigned global scale local- and foreign-currency ratings of Ba2 to the city of Krasnodar as well as a national scale rating of Aa2.ru.

The outlook is stable.

Ratings are supported by the city's moderate but growing direct debt exposure, as well as its service-oriented and diversified economic base, Moody's said.

"Krasnodar's debt burden is expected to grow going forward. That said, future borrowings should carry an extended maturity easing the city's refinancing needs in the medium term," Alexander Proklov, a Moody's analyst, said in a statement.

Ratings are constrained by a significant deterioration in its operating performance in 2009, which reflected a sharp reduction in regional transfers and supplementary tax proceeds, Proklov said.

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