Fitch rates Nizhniy Novgorod bond A(rus)

Fitch Ratings said it assigned an A(rus) national long-term rating to the Russian region of Nizhniy Novgorod's forthcoming RUB2 billion issue of domestic five-year bonds. The region has B+ long-term foreign- and local-currency ratings and a B short-term rating.

The outlook is stable.

The agency said the ratings reflect the region's strong local economy, which provides ongoing tax revenue increases and allows the region to strengthen its budgetary performance and debt structure.

However, the ratings also factor in Nizhniy Novgorod's high degree of budget rigidity, with transfers dominating its operating spending, and the region's high debt burden, Fitch said.

The stable outlook reflects Fitch's expectations that the economic expansion will drive revenue growth, further improving budgetary performance and debt burden reduction.

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