ACRA assigns BBB-(RU) to the Kaliningrad Region, outlook Stable

The credit rating assigned to the Kaliningrad Region (hereinafter — the Region) is determined by the influence of one procyclical industry on the regional economy, the tightness of the local market, and a heavy reliance of budget indicators on federal transfers. Potential outlook or rating change factors: The Stable outlook assumes that the rating will most likely stay unchanged within the 12 to 18-month horizon. A positive rating action may be prompted by: Diversification of the industrial output structure in the Region and reduction of its dependence on procyclical production; Engineering infrastructure development aimed at replacement of obsolete fixed assets; A change in debt structure in terms of building up proportion of longer debt; An improvement of municipalities’ and public sector companies’ financial situation; An increase in the budget liquidity level. A negative rating action may be prompted by: A significant curtailing of federal transfers that compensate for customs privileges granted to local producers; A dramatic decline in the proportion of federal transfers spent on capital expenditures; A debt portfolio growth while maintaining the current redemption schedule.

• Registration country
  Russia