S&P rates Lviv bond CCC+/uaBB

Standard & Poor's said it assigned a CCC+ long-term local currency debt rating and a uaBB Ukraine national scale rating to a proposed UAH 300 million senior unsecured bond to be issued by the Ukrainian City of Lviv (CCC+/negative; Ukraine national scale uaBB).

Proceeds will be used to finance a stadium for the city's part of the Union of European Football Associations' EURO 2012 preparation program.

The issue will have quarterly fixed coupon payments of less than 20% per year and five-year maturities. Placement of the bond is planned for July to August of 2009.

Ratings on the bond mirror those on the city, which reflect Lviv's low financial flexibility and high dependence on central government decisions, high infrastructure needs, exacerbated by the EURO 2012 program, operating-expenditure pressures, and low wealth levels, the agency said.

These weaknesses are mitigated by the city's importance as one of western Ukraine's commercial centers, S&P said.

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