The credit rating of the Tver Region (hereinafter, the Region) has been upgraded due to a decline in the debt refinancing risks and an improvement of the Region’s debt repayment schedule, which were facilitated by this year’s restructuring of budget loans.
The credit rating of the Tver Region reflects the low debt load and minimal debt refinancing risks, high share of capital expenditures in the Region’s total expenditures (less subventions), and a significant amount of accumulated liquidity. The rating is constrained by the Region’s moderate economic development and moderate budget operational efficiency, as well as the budget’s significant need for additional funds.
The Region is part of the Central Federal District and home to about 1.2 mln people. According to the Region’s estimates, its gross regional product (GRP) exceeded RUB 842 bln in 2024.
KEY ASSESSMENT FACTORS
Low debt load and minimal debt refinancing risks. By the end of 2024, the Region’s debt decreased by about a quarter year-on-year to RUB 14.3 bln and was fully represented by budget loans. Based on the repayment schedule as of January 1, 2025, the Region had to repay 21% of its debt obligations in 2025 and 18% in 2026.
By July 1, 2025, the debt volume remained the same, but the repayment schedule had changed significantly. In April, the budget loans were restructured in accordance with Decree of the Government of the Russian Federation No. 79. According to the updated schedule, in the next four years the Region will have to repay no more than 6% of the debt annually.
The debt load of the Region remains low. The ratio of debt to current revenues by the end of 2025 is expected to be 17%.
Interest expenses are not burdensome for the Region due to the non-commercial nature of the debt: the averaged1 interest expenses for 2022–2026 are well below 1% of total budget expenditures (less subventions). The ratio of the Region’s debt to the GRP projected for the current year will be about 2%.
The qualitative assessment of the Region’s debt profile corresponds to the second category. Thanks to the debt restructuring, the weighted average debt repayment period significantly exceeds four years. The debt portfolio includes only budget loans. The budget’s operational efficiency is consistently positive (with the exception of the forecast indicator for 2025). According to the Region, the volume of overdue accounts payable was minimal as of January 1, 2025. The debt burden of municipalities is low, and by the end of 2024, the ratio of debt to total tax and non-tax revenues (TNTR) of municipalities was 14%. At the beginning of this year, almost the entire volume of total municipal debt (98%) fell on the city of Tver. As of January 1, 2025, the financial debt of public sector enterprises amounted to RUB 2.2 bln, and their overdue accounts payable amounted to RUB 2.5 bln. According to the Region, it Region has no obligations under PPP projects, concessions or leasing.
1 Hereinafter, averages are calculated according to the Methodology for Assigning Credit Ratings to Regions and Municipal Entities of the Russian Federation.
Moderate operational efficiency and a significant budget need for additional funds. The average ratio of the current account balance to current revenues for 2022–2026 will be slightly less than 7%. ACRA believes that in 2025, against the background of the expected growth in current expenses, the volume of the current account balance may become negative (at 2% of the Region’s current revenues). In this case, the Region will have to allocate some of the previously accumulated funds to partially finance current expenditures.
The averaged share of capital expenditures in total expenditures for 2022–2026 will exceed 26%, while the qualitative assessment of budget expenditure flexibility corresponds to the second category. Capital expenditures are often financed approximately equally from the regional and federal budgets. The current account balance after interest income and expenses, as well as the modified free cash flow, are consistently positive (with the exception of forecast figures for 2025).
The share of TNTR in the total revenues of the Region (less subventions) averaged over 2022–2026 will be 77%, which indicates a moderately low dependence on the higher-level budget. The ratio of the modified budget deficit (MBD) averaged over the above period to current revenues is at -9%. The need of the Region to use additional funds is assessed by ACRA as significant. According to the Agency’s forecasts, the MBD for 2025 will amount to about 29% of the Region’s current revenues. Nevertheless, given the low debt burden of the Region, ACRA has adjusted the averaged ratio of MBD to current revenues to a higher category.
The qualitative assessment of the budget profile corresponds to the first category. No breaches of budget legislation have been identified. The Region additionally transfers to lower-level budgets a portion of personal income tax revenues (including per additional standards set forth by regional legislation), as well as revenues from taxes levied under the simplified taxation system, and part of other revenues. The estimated shortfall in tax revenues associated with the application of tax benefits in 2024 was insignificant for the regional budget. The Agency notes significant periodic deviations of some actual budget revenues from planned targets.
Against the backdrop of accelerated growth in budget revenues, the Region completed 2024 with a surplus of 1% of TNTR, which (along with partial use of account balances) made it possible to reduce part of the debt.
According to budget allocations approved as of July 1, 2025, the revenue side of the Region’s budget will grow by 6% year-on-year. At the same time, TNTR will increase by 3% due to projected growth of personal income tax revenues, corporate income tax revenues, and taxes on goods and services by 11%, 6%, and 7%, respectively. Transfers will increase by 16% year-on-year, mainly due to capital transfers growing by a third. Budget expenditures have been approved at 29% higher than the actual indicator last year, while in absolute terms ACRA believes that current expenditures will post the most growth. In this case, the budget deficit will be 27% of TNTR (taking into account the significant volume of balances in accounts) and will be financed mainly at the expense of accumulated liquidity.
Account balances allow the Region to finance its entire deficit expected in 2025. At the end of 2024, the size of funds accumulated by the Region had declined by 13% compared to the indicator at the start of the year. Over the past 12 months, account balances have averaged more than three times the monthly budget expenditures. In 2025, the volume of account balances will allow the Region to finance the expected budget deficit in full (along with the repaid volume of debt obligations).
The liquidity ratio of the budget will be 113% in 2025.
The quality assessment of budget liquidity corresponds to the first category. Debt liability refinancing risks are assessed as minimal thanks to the non-commercial nature of debt and the extension of its repayment periods on the back of debt restructuring. Accounts payable were insignificant at the start of the year. The Region currently does not have any open credit lines. The Region does not plan to obtain short-term budget loans from the Federal Treasury Department this year.
Diversified economy with moderate economic development indicators. The Region’s economy is well-diversified, which, in ACRA’s opinion, partially minimizes the risks of shortfall in expected revenues. The most significant share (20%) of the Region’s GRP in 2023 was generated by the manufacturing industry. The industries that form the Region’s public sector accounted for about 16% of the GRP. Wholesale and retail trade, as well as real estate transactions, accounted for 14% each.
The budget’s tax revenues are also quite diversified — the maximum share of revenues for 2024, according to ACRA’s estimates, came from manufacturing (27%), including metallurgical production and production of finished metal products (6%), as well as the production of other vehicles and equipment (4%). Other significant industries in terms of tax revenues are trade (13%), production, transmission and distribution of electricity (12%), and transportation and storage (7%). Public sector industries accounted for about 15% of tax revenues in 2024.
The ratio of the Region’s averaged per capita GRP to the national average for 2020–2023 was 57%. According to the Region’s current forecasts and ACRA’s expectations, this ratio could remain at a comparable level for 2021–2024.
The ratio of averaged wages to the regional subsistence minimum for the working-age population for 2021–2024 exceeded 3.5. The average unemployment rate for the same period was 2.9%.
KEY ASSUMPTIONS
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Execution of the regional budget in accordance with the budgetary allocations approved as of July 1, 2025.
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Use of most accumulated liquidity to finance the projected budget deficit.
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No need to attract commercial debt at the end of this year.
POTENTIAL OUTLOOK OR RATING CHANGE FACTORS
The Stable outlook assumes that the rating will highly likely stay unchanged within the 12 to 18-month horizon.
A positive rating action may be prompted by:
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Faster growth of socioeconomic development of the Region;
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Higher operational efficiency of the budget;
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Lower need of the budget for additional financing, which helps to preserve accumulated liquidity.
A negative rating action may be prompted by:
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Ratio of the Region’s debt to current revenues exceeding 30%;
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Materialization of significant risks to refinancing debt liabilities;
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Sustainable decline in the share of TNTR in the Region’s total revenues;
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Significant decline of available liquidity.
issue ratings
There are no outstanding issues.
regulatory disclosure
The credit rating of the Tver Region has been assigned under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Regions and Municipal Entities of the Russian Federation and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating of the Tver Region was published by ACRA for the first time on December 12, 2017. The credit rating and its outlook are expected to be revised within 182 days following the publication date of this press release as per the Calendar of sovereign credit rating revisions and publications.
The credit rating was assigned based on data provided by the Tver Region, information from publicly available sources (the Ministry of Finance, the Federal State Statistics Service, and the Federal Tax Service), and ACRA’s own databases. The credit rating is solicited and the Government of the Tver Region participated in its assignment.
In assigning the credit rating, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided no additional services to the Government of the Tver Region. No conflicts of interest were discovered in the course of credit rating assignment.
