The rating of Kiev and Kharkov rose from Caa2 to Caa1 with a stable Outlook.
International rating Agency Moody’s raised the rating of Kyiv and Kharkiv from Caa1 to Caa2 with a stable Outlook. Data are published in a press release from the Agency.
According to the report, the rating upgrade of two Ukrainian cities should be for raising the sovereign rating of Ukraine from Caa2 to Caa1 and the Outlook change to stable from positive.
The Agency’s analysts explain that the change in the ratings of Kyiv and Kharkiv reflects the improving operating environment. “The increase in sovereign rating indicates reduce systemic risk local authorities, given their close financial and operational ties with the Central government,” – said in the message.
According to Moody’s, the creditworthiness of both cities has improved significantly, which creates a base for greater resistance to external risks. “Kiev and Kharkov continue to achieve positive financial returns and reducing debt in difficult economic conditions”, – States analysts.
“However, Kyiv is exposed to currency risk as its debt is fully denominated in dollars. Currently, the direct debt of the city is $351 million of liabilities to Ministry of Finance of Ukraine and the $115 million loan to be paid until 2022,” – noted in Moody’s.
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