Standard & Poor's gives Chelyabinsk Region great ratings

15 December 2010 (10:02)

The international rating agency gave Chelyabinsk Region BB+ long-term credit rating on the international scale and ruAA- on the national scale, with Stable rating outlook, which signifies the agency’s idea of the region’s conservative debt-management and money reserve policies’ potential.

Standard & Poor's representatives actually came to Chelyabinsk earlier to meet Governor Mikhail Yurevitch.

As it happens, out of twenty-two Russian federal constituencies which have been rated by the agency, Khanty-Mansiysky and Yamalo-Nenetsky Autonomous Regions are the only territories whose international and national scale ratings look better than those of Chelyabinsk Region. The region was also outstripped by Moscow and Saint Petersburg on the international scale, whereas the Republic of Bashkortostan, Krasnodar Territory and Samara Region were given the same international (Bashkortostan) and national (Krasnodar Territory and Samara Region) ratings as Chelyabinsk Region.

The long-term international scale credit rating reflects an issuer’s ability to meet its liabilities obligations in due time. A rating like BB means a given region is out of trouble in the short run, but remains highly sensitive to unfavorable commercial, financial, and economic changes. A rating like ruAA on the national scale reflects an issuer’s ability to meet its liabilities obligations in time that is stronger that that of other Russian issuers.

Standard & Poor’s method of rating the regional and local governments is based on an all-round analysis of such factors as the economic situation, predictability of development, sustainabile support of the state and municipal finances, the quality of budget management, and some others. Chelyabinsk Region’s great ratings are based on the fact that the region has got considerable reserves and not too much debt and knows how to cut down on expenses under trying circumstances, Standard & Poor's analysts believe.

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