S&P rates Lviv bond CCC+

Standard & Poor's said it assigned a CCC+ long-term local-currency debt rating and uaBB Ukraine national scale rating to a proposed UAH 90 million senior unsecured bond to be issued by the Ukrainian City of Lviv.

The recovery rating on the bond is 4.

The proceeds will be used to repay the remaining UAH 90 million of a 20% UAH 200 million bond due 2014.

The issue will have quarterly fixed-coupon payments of not more than 14% a year and three-year maturities.

The ratings mirror those of the city, reflecting its low financial flexibility within Ukraine's system of interbudgetary relations and ongoing expenditure pressures, S&P said.

The city's weak liquidity and weak credit culture also constrain the rating, the agency said.

Lviv's modest debt service and debt and its importance as one of western Ukraine's commercial centers help offset these negative factors, S&P added.

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