Moody's upgrades Kyiv, Kharkiv

Moody's Investors Service said it upgraded the city of Kyiv's and the city of Kharkiv's issuer ratings to Caa1 from Caa2.

The agency also revised their outlooks to stable from positive.

This action follows a decision to upgrade the Ukraine government bond rating to Caa1 from Caa2 and revision of the sovereign's outlook to stable from positive.

The upgrades on both cities reflect the improvement in the operating environment for Ukrainian sub-sovereigns, Moody's said.

The upgrade indicates a reduction in the systemic risk to which the Ukrainian local governments are exposed due to their close financial and operational linkages with the central government, the agency said.

Ukrainian local governments depend on revenues that are linked to the sovereign's macroeconomic and fiscal performance, Moody's added.

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