October 11, 2005 | Cbonds
|Standard & Poor's Ratings Services said today it affirmed its 'B-' foreign currency issuer credit and 'ruBBB-' Russia national scale ratings on Klin Rayon (Klin)--a district in the Moscow Oblast (foreign currency; BB-/Positive/--; Russia national scale rating, ruAA-) in The Russian Federation (foreign currency, BBB-/Stable/A-3; local currency, BBB/Stable/A-3; Russia national scale rating, ruAAA). The outlook is stable. |
"The ratings on Klin are based on the continued uncertainty owing to the upcoming municipal reform, and Klin's low flexibility and predictability similar to other districts," said Standard & Poor's credit analyst Felix Ejgel. "This is due to its dependence on discretionary transfers from Moscow Oblast's budget, low financial autonomy, and continued consolidation of tax revenues in the Oblast budget," he added.
A major supporting factor, however, is Klin's strategic location on the main highway between Moscow (foreign currency, BBB-/Stable/--) and St. Petersburg (foreign currency, BB+/Stable/--), which helps attract investments, and maintain high economic growth.
"Standard & Poor's expects that fast economic development and expected support from Moscow Oblast should help Klin to adequately finance its infrastructure needs, together with growing salaries and wages," said Mr. Ejgel. If the municipal reform brings more predictability in Klin's revenues, including subsidies from Moscow Oblast's budget and spending responsibilities--while strong financial indicators remain--the ratings may be raised. If the municipal reform leads to a mismatch between revenues and expenditures--exacerbated by strong growth of the debt burden beyond manageable levels--the ratings on Klin Rayon may be put under pressure.
Company: Klin District
|Full company name|
|Country of risk||Russia|
|Country of registration||Russia|