17:29 31.01.2014

S&P revises Lviv's outlook to negative, affirms ratings at 'CCC+/uaBB'

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Standard & Poor's Ratings Services on January 30, 2014, revised its outlook on the Ukrainian city of Lviv to negative from positive, S&P said in a statement.

At the same time, S&P affirmed its 'CCC+' long-term issuer credit rating and 'uaBB' Ukraine national scale rating on Lviv.

"The outlook revision follows our rating action on Ukraine," S&P said.

According to S&P, the ratings on Lviv are constrained by the rating agency's view of Ukraine's volatile and underfunded intergovernmental system and low wealth levels, and Lviv's limited financial flexibility on revenue and expenditure.

"They also reflect our view of the city's liquidity as "very negative." Lviv has repeatedly missed repayments on a loan from Ukraine's Ministry of Finance that it guaranteed. Although the city is trying to resolve the problem, the situation weighs on our assessment of financial management, which we view as "very negative" in an international context. Material contingent liabilities related to municipal utilities also constrain the ratings," S&P said.

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