Fitch affirms Ukraine's Kyiv and Kharkiv at 'B-', outlook stable
Fitch Ratings has affirmed Kyiv's and Kharkiv's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'B-,' according to Fitch press releases.
The outlooks on both cities are stable, Fitch Ratings said.
The agency also affirmed Kyiv's National Long-Term Rating at 'BBB(ukr).'
The affirmation of Kyiv's Long-Term Foreign- and Local-Currency IDRs reflects Fitch's unchanged base case scenario regarding the city's adequate budgetary performance, albeit prone to volatility due to ongoing budgetary and tax reforms and a weak institutional framework for subnationals in Ukraine (B-/Stable). The ratings also factor in reduced direct debt following the debt restructuring, but still high contingent liabilities.
In addition, Fitch Ratings affirmed Kharkiv's Short-Term Foreign-Currency IDR at 'B.' The agency also upgraded the city's National Long-Term rating to 'AA-(ukr)' from 'A+(ukr)' with stable outlook.
Read alsoFitch affirms Ukrainian Railway at 'CCC'The affirmation of Kharkiv's Long-Term Foreign- and Local-Currency IDRs reflects Fitch's unchanged expectation for the city's satisfactory budgetary performance and zero direct debt over the medium term as well as uncertainty of future growth prospect due to unpredictable fiscal changes and the overall weakness of sovereign public finances in Ukraine, according to Fitch. The upgrade of the National Long-Term rating reflects the city's recent consolidation in operating performance and better metrics compared with national peers, it said.