Klin Rayon Outlook Revised To Positive; 'B-' Rating Affirmed; National Scale Raised To 'ruBBB'
November 8, 2006
MOSCOW (Standard & Poor's) Nov. 3, 2006--Standard & Poor's Ratings Services said today it revised its outlook on the Russian Klin Rayon to positive from stable on high economic and tax base growth, good budgetary performance, and positive trends in the debt profile. At the same time, the long-term issuer credit rating on Klin Rayon was affirmed at 'B-'. In addition, Standard & Poor's raised the Russia national scale rating on the rayon to 'ruBBB' from 'ruBBB-'. "The ratings on Klin Rayon, located in the Moscow Oblast (BB/Positive/--; ruAA), are constrained by low financial flexibility and predictability, continuing uncertainty created by ongoing municipal reform, and weak liquidity," said Standard & Poor's credit analyst Irina Pilman. "A significant strength, however, is Klin's favorable location, which helps to attract investments and maintain high economic growth, resulting in the growth of the tax base." The favorable location of the rayon attracts both domestic and foreign investors, which contribute to its high economic growth rate and diversification of the local economy. Industrial output increased by a high 8.7% in 2005, and is expected to be more than 8% in 2006-2008. The total amount of taxes collected on the rayon's territory grew, in nominal terms, by 23% annually in 2005 and 2006. The growing economy could also help to further increase the wealth level in the rayon, which is now higher than the Russian average. "We expect that Klin's rapid economic development will continue," said Ms. Pilman. "Moreover, we expect that the amount and timeliness of subsidies from the Moscow Oblast in the next few years will be sufficient for the rayon to maintain good budgetary performance, and to meet its needs for infrastructure improvement and increasing public sector salaries." If the rayon successfully lengthens the maturity on its debt, and if the financial position of the rayon's municipal companies improve, the ratings could be raised. A reduction in the rayon's revenues and deterioration in its debt indicators could lead to the outlook being revised back to stable. The details of how intergovernmental reform will be implemented will be the key rating factor for Klin in the long term. |
Company — Klin District
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Registration countryRussia
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