You're reading: Fitch affirms City of Kyiv at ‘B-‘ for long-term foreign and local currency

Fitch Ratings has affirmed the City of Kyiv's Long-term foreign and local currency ratings at 'B-', with stable outlooks, and its short-term foreign currency rating at 'B'.

“The affirmation of Kyiv’s ratings reflects its status as capital and implicit support from the central government, satisfactory budgetary performance and stabilized debt,” reads the report, which was issued on July 19, 2013.

The ratings also factor in refinancing risk, stemming from debt obligations maturing in 2014 and exposure to foreign currency risks on eurobonds.

Fitch said that the city would be refinancing domestic bonds worth Hr 3.5 billion maturing in 2014-2015, and Eurobonds worth $250 million coming due in 2015.

The agency has also affirmed the city’s National Long-term rating at ‘BBB+(ukr)’ with a stable outlook.

“Fitch expects the city’s direct risk to increase up to 60 percent of current revenues in 2013, with stabilization at this level in 2014-2015,” reads the report.

Fitch also said it expects the consolidation of Kyiv’s satisfactory budgetary performance in 2013-2015, with margins at about 8-10 percent.

The city’s economy is well diversified and service-oriented; Kyiv contributed 18 percent to Ukraine’s gross domestic product (GDP) in 2012.

“The city’s gross value added (GVA) increased by 1 percent year-on-year in 2012, while the administration forecasts sluggish growth at about 1.5 percent -2.5 percent year-on-year in 2013-2015,” reads the report.