BBB Ratings affirmed for Szczecin

Local government ratings in the CEE countries have a relatively short history, with the majority of entities first rated in 1997-1998. Over the past five years there have been a large number of rating changes, which are still driven by nationwide developments, such as changes to the intergovernmental system or improvements in the country's policy environment.

So far over the past few years, Szczecin local government has shown good budgetary performance despite significant financial pressures stemming from large infrastructure financing needs and intergovernmental reforms. Szczecin' s ability to maintain sound financial performance will, therefore, to a large extent depend on the municipality's own management and budgetary discipline. The city leaders have an understanding of the fact that a city's international competitiveness also depends on such factors as credibility and power.

Since 1998 Szczecin is rated by two independent rating agencies - Standard & Poor's and Fitch Ratings Ltd. - which belong to the group of the best-recognised and largest rating agencies in the world.

Standard & Poor's Ratings Services affirmed its BBB long-term issuer credit and senior unsecured debt ratings on the City of Szczecin. The outlook is stable. The ratings on Szczecin reflect its economy and the city's budgetary performance, which, although adversely affected by the Polish administrative reform and the economic slowdown in Poland, has been prevented from deteriorating significantly, owing to the city's prudent budgetary management.

Szczecin's debt burden is expected to remain at a low level compared with other Polish cities rated by Standard & Poor's. Fitch Ratings, too, affirmed the Long-term foreign and local currency ratings of the City of Szczecin at "BBB".

Rating agencies rate regional and local governments in many European countries. In all cases, the analytical methodology is the same, focusing on a range of economic, system, and administrative factors, budgetary performance and flexibility, and the entity's financial position.