Fitch affirmed the ratings of the Nizhny Novgorod region at the level «BB-», Outlook Stable »

Today, Fitch Ratings affirmed the ratings of the Nizhny Novgorod region of Russia: long-term foreign currency rating and long-term local currency rating at "BB-" (BB minus) and short-term foreign currency rating at "B". Fitch has also affirmed the national Long-term rating of "A + (rus)". The outlook on all long-term ratings on a "stable". The affirmation reflects the well-diversified economy of Nizhny Novgorod region, good performance of the budget and moderate debt burden. At the same time, the ratings also take into account such factors as the expected increase straight debt and a slowdown of the national economy, which is likely to lead to a deterioration of fiscal performance in the region. "stable" outlook reflects expectations Fitch, that the region will successfully manage operating costs, and it compensates for the expected downward pressure on tax revenues and allow the Nizhny Novgorod region to maintain acceptable indicators of the operating margin in the medium term. According to the forecast Fitch, the debt burden will remain manageable. The region has a well diversified economy with a developed industrial base. Leading 10 companies account for 20% of tax revenues in 2007, making it less dependent on any particular company or sector. In 2006 and 2007. growth rate of Nizhny Novgorod region of 8% over the previous year, supporting the growth of tax revenues and good cost performance. According to the results of the first 9 months of 2008 the region had an operating balance of 10.7 billion . rubles. and Fitch expects that operating margin for the full year will be close to the results for 2007 in the same time, the expected slowdown in the Russian economy is likely to lead to a deterioration of the budget figures for 2009 with reduced operating margins to about 5 %, which, however, will be in the range of the current rating level. The regional administration has demonstrated good control of debt management in the region. There was an upper limit on total debt amounting to 40% of its revenues (total revenues minus transfers from the federal budget), which is substantially below the permitted level of 100% as permitted by federal law. As a result of sound financial policies of the overall debt burden on the budget of the region (direct risk, that is, direct debt plus other liabilities on the classification of Fitch, plus guarantees) decreased with 44.6% of operating revenues in 2003 to 11,4% at end-2007 The main part of the risk area consists of a long-term bonds. According to budget projections for 2009 are expected deficit before debt at 5.5 billion rub. Nizhni Novgorod Region intends to attract bank loans and to issue bonds in the domestic market of $ 3 billion. This should lead to an increase in debt of the region in absolute terms from 5,2 billion rubles. on November 1, 2008 to 10,7 bil. the end of 2009, however, the relative debt burden will remain moderate, as on Russian and international standards, and will not exceed 15% of operating revenues. Nizhniy Novgorod Region is located in the central part of the Russian Federation. The share of in gross domestic product (GDP) in 2006 amounted to 1,2%. It is home to 2,4% of Russia's population.