Moody's upgrades Kyiv

Moody's Investors Service said it upgraded the city of Kyiv's issuer rating to Caa2 from Caa3.

The city's outlook remains positive.

The upgrade follows the city's improved financial performance and successful restructuring of all of the city's foreign-currency denominated debt, which eases Kyiv's refinancing pressure, Moody's said.

The upgrade reflects a view that the creditworthiness of the city has materially improved setting the base for a greater resilience to external shocks, the agency said.

The improvement, reflected in the upgrade of Kyiv's baseline credit assessment to Caa2 from Caa3, stemmed from an expanded revenue base while the city contains growth in expenses, Moody's said.

The revenue base benefitted from a change in central government tax entitlements, increased transfers and high inflation that positively influenced the nominal growth of taxes, the agency said.

Kyiv's operating surpluses averaged 33% of operating revenue over the last three years compared with 14% in 2014, Moody's said.

The agency said it believes Kyiv will post strong, albeit declining, operating margins at around 30% of operating revenue in 2018 to 2019 on the back of accumulated spending pressures and ongoing minimum wage increases.

Kyiv benefits from its capital status and remains one of the wealthiest cities in the country, posting a GDP per capita of 340% of the national level, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.