S&P assigns Lviv bond B+

Standard & Poor's said it assigned its preliminary B+ long-term local currency debt rating and its uaA+ Ukraine national-scale rating to the proposed Ukrainian hrivnya 92 million debut senior unsecured bond to be issued by the Ukrainian City of Lviv (B+/stable, Ukraine national-scale uaA+).

This rating is subject to final bond documentation, including all necessary approvals, the agency said, adding that the issue will consist of two tranches, UAH50 million and UAH42 million, with quarterly fixed coupon payments of less than 12% per year and five-year maturities.

Placement of the first tranche is planned for June or July, with the second tranche to follow in the near term, the agency said.

"The ratings on the bond mirror those on the city, which reflect Lviv's low financial flexibility, high infrastructure needs, operating-expenditure pressures and low wealth levels," said S&P credit analyst Boris Kopeykin.

These weaknesses are mitigated by the city's modest debt accumulation plans and moderate, but stable, financial performance, the agency noted.

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