S&P lowers Lviv to negative

Standard & Poor's said it revised the outlook on the Ukrainian City of Lviv to negative from positive.

The agency also said it affirmed the CCC+ long-term issuer credit rating and uaBB Ukraine national scale rating on Lviv.

The outlook revision follows a similar action on Ukraine, S&P said.

The ratings on Lviv are constrained by Ukraine's volatile and underfunded intergovernmental system and low wealth levels, the agency said, and Lviv's limited financial flexibility on revenue and expenditure.

The ratings also consider an assessment of the city's liquidity as very negative, S&P said.

Lviv has repeatedly missed repayments on a loan from Ukraine's Ministry of Finance that it guaranteed, the agency said.

Although the city is trying to resolve the problem, the situation weighs on the agency's assessment of financial management, which is viewed as very negative in an international context.

Material contingent liabilities related to municipal utilities also constrain the ratings, S&P said.

The ratings also reflect its fairly sound financial performance and modest debt, the agency said.

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