February 14, 2014 / 4:37 PM / in 4 years

Fitch Downgrades Cities of Kyiv & Kharkov and Odessa Region to 'CCC'

Link to Fitch Ratings' Report: Ukrainian Subnationals - Rating Action ReportMOSCOW/LONDON, February 14 (Fitch) Fitch Ratings has downgraded the City of Kyiv, the City of Kharkov and Odessa Region's Long-term foreign currency Issuer Default Ratings (IDRs) to 'CCC' from 'B-' and Short-term foreign currency IDR to 'C' from 'B'. Fitch has affirmed the Long-term local currency IDRs at 'B-'. The Outlooks on the Long-term local currency IDRs are Negative. Kyiv's outstanding senior unsecured eurobonds totalling USD550m (US225407AA34, US50154TAA34, XS0644750027 and XS0233620235) have been downgraded to 'CCC' from 'B-'. Its domestic bonds totalling UAH5.4bn (UA4000142707, UA4000142715, UA4000142723, UA4000142731, UA4000142749 and UA4000142884) have been affirmed at 'B-'. The Long-term local currency rating of Kharkov's outstanding UAH99.5m senior unsecured domestic bonds (ISIN UA4000131346) has also been affirmed at 'B-'. Fitch expects to publish a further rating action commentary in the near future summarising public finance Ukrainian National Scale ratings. Under EU credit rating agency (CRA) regulation, the publication of International Public Finance reviews is subject to restrictions and must take place according to a published schedule, except where it is necessary for CRAs to deviate from this in order to comply with their legal obligations. Fitch interprets this provision as allowing us to publish a rating review in situations where there is a material change in the creditworthiness of the issuer that we believe makes it inappropriate for us to wait until the next scheduled review date to update the rating or Outlook/Watch status. The next scheduled review date for Fitch's rating on the City of Kyiv was 11 April 2014 and for the City of Kharkov and Odessa Region 16 May 2014. However, following the downgrade of Ukraine on 7 February 2014 (see 'Fitch Downgrades Ukraine to 'CCC'' dated 7 February 2014 at www.fitchratings.com) we have taken a similar rating action on these issuers as they were rated at the same level as the sovereign. KEY RATING DRIVERS The downgrade of the City of Kyiv, the City of Kharkov and Odessa Region's ratings reflects the application of Fitch's 'International Local and Regional Governments Rating Criteria outside United States'. Under our criteria, a local or regional government can only be rated above the sovereign in exceptional circumstances. RATING SENSITIVITIES Any downgrade of Ukraine would lead to downgrade. Conversely, a sovereign upgrade would lead to an upgrade of the issuers' ratings. Contact: Primary Analyst (City of Kyiv and Odessa Region) Konstantin Anglichanov Director +7 495 956 99 94 Fitch Ratings CIS Ltd 26 Valovaya Street Moscow 115054 Primary Analyst (City of Kharkov) Elena Ozhegova Associate Director +7 495 956 99 87 Fitch Ratings CIS Ltd 26 Valovaya Street Moscow 115054 Secondary Analyst (City of Kyiv) Elena Ozhegova Associate Director +7 495 956 99 87 Secondary Analyst (City of Kharkov) Konstantin Anglichanov Director +7 495 956 99 94 Secondary Analyst (Odessa Region) Victoria Semerkhanova Analyst +7 495 956 99 65 Committee Chairperson Guilhem Costes Senior Director +34 93 323 8410 Media Relations: Julia Belskaya von Tell, Moscow, Tel: +7 495 956 9908, Email: julia.belskayavontell@fitchratings.com; Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com. Additional information is available on www.fitchratings.com Applicable criteria 'Tax-Supported Rating Criteria' dated 14 August 2012, 'International Local and Regional Governments Rating Criteria outside United States' dated 9 April 2013 and 'Rating of Public Sector Entities Outside the United States' dated 4 March 2013 are available at www.fitchratings.com. Applicable Criteria andALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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