OREANDA-NEWS. December 18, 2007. Credit-Rating, a nationally recognized credit rating agency in Ukraine has today upgraded to uaAA- (uaAA minus) from uaA the long-term credit rating carrying Stable outlook assigned to UAH75m coupon bonds (B-E series) due 2010, which were issued by Zaporizhya (Zaporozhie) city council, the agency's press service reported. In the course of the rating`s revision procedure Credit-Rating considered City"s social-economic and financial indicators for 1H2007 as well as other inside information furnished by the City.

An obligor or a debt liability with uaAA credit rating is characterized with the VERY STRONG creditworthiness as compared to other Ukrainian obligors or debt liabilities. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories.

"Stable" outlook indicates that there are no anticipated reasons to change the rating in the course of the year.

Factors maintaining the credit rating:

The City enjoys low direct debt as of Jul. 1, 2007, specifically the direct debt accounts for 7.5 per cent of the 2007 budget amended incomes excl. transfers. The decreased City budget`s dependency on attraction of loans from the general treasury account: the amount of the loan attracted in 1H2007 did not exceed 1 per cent of the annual expenditures of the budget general fund attributable to 2007 (2006: 17.5 per cent). City's growing key indicators in January-June 2007 as compared to the similar year-earlier period: the industrial production sales rose 35 per cent; the retail turnover grew 42.2 per cent, export turnover increased by 45.3 per cent. These indicators calculated per capita exceed the national averages 4x, 1.7x, and 3.2x respectively. The City's social development indicators improved in January-June 2007: the number of employees increased by 2.4 per cent to 297.6K, which accounted for 39 per cent of the overall City`s population; the average monthly salary grew 16.2 per cent to UAH1,420, which exceeds 16 per cent the national average; the unemployment rate retained at 0.6 per cent, which is 3.8x lower than the national average.

Factors constraining the credit rating:

High deterioration of City's main funds, including the home sector, utilities and transport infrastructure, which requires significant investments for their renovation combined with high population's arrears for utilities services as calculated per capita. High pollution of environment, which negatively affect City's social sector.