02 June 2004 04:59
S&P assigns Ufa`s Sr Unscd Bond `ruA-` Natl Scale Rtg
MOSCOW. June 2 (Interfax) - Standard & Poor's Ratings Services has assigned its 'ruA-' Russia
national scale senior unsecured debt rating to the City of Ufa's proposed 500 million rubles ($17 million) fixed-
coupon bond issue, the agency said in a press release.
The bond, which will be issued in June 2004, will have eight coupon payments of 5% each, and a 1,456-day maturity.
The debt is being issued to finance the city's investment program.
The bond rating is the same as Ufa's Russia national scale issuer credit rating
"The ratings on the city are constrained by the uncertainties caused by the ongoing municipal reforms; federal
and regional control over tax rates, the tax base, and tax distribution between the levels of government; and
large--although decreasing--concentration in the petrochemical industry, in terms of both total industrial output and
tax revenues," said Standard & Poor's credit analyst Boris Kopeykin.
Another constraint is Ufa's exposure to commercial risks, owing to budget loans provided by the city to local
enterprises.
The ratings are supported by an expanding economy and future growth prospects, underpinned by investments, prudent
financial policies, low debt levels, and above-average Russian wealth levels.
"We expect the city's economy to become more diversified and continue to grow by 5%-6% annually, and the
city's debt level to remain below a manageable 30%," said Kopeykin.
Any movements in the Russia national scale and global scale long- term ratings will largely depend on the outcome of
the municipal reform and the consequent improved predictability of the city's financial position. [RU ASIA EUROPE
EEU EMRG AAA] me
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