Fitch rates Nizhniy Novgorod bond A+(rus)

Fitch Ratings said it assigned Nizhniy Novgorod Region's forthcoming issue of RUB2.7 billion domestic bond with a maturity of five years a national long-term rating of A+(rus). The region has long-term foreign- and local-currency ratings of BB- with stable outlook, national long-term rating of A+(rus) with stable outlook and short-term rating of B.

The rating reflects the region's strengthening budgetary performance, caused by fast tax revenue growth and control over operating expenditure, decreasing debt burden and improving debt structure, Fitch said.

However, the rating also factors in a high degree of budget rigidity, as transfers of all kinds dominate operating spending, the agency said, and a low level of capital spending.

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