RATING REPORT
The Slovak Rating AgencyTM hereby increases the rating for the Town of Dubnica nad Váhom as follows:
| Long-term domestic crown rating | BB (stable outlook)
|
| Long-term FX rating | B+ (stable outlook)
|
| Short-term rating | S3
|
The Town of Dubnica nad Váhom is assigned the long-term rating in the category of transactions in Slovak crowns of BB (stable outlook). The rating of the State in the domestic crown category is A- (stable outlook). In the category of transactions in foreign currencies the Town of Dubnica nad Váhom is assigned the rating of B+ (stable outlook). The short-term rating of the Town of Dubnica nad Váhom is S3, which is the best possible short-term rating for an entity with a long-term rating of BB.
Justification:
- With regard to strategic planning and development of the town, compared with the preceding period some qualitative changes have taken place. A priority investment of the town for the period 2004-2006 will be the creation of an industrial estate in the cadastral localities of Dubnica nad Váhom and Nová Dubnica covering an area of 70 hectares, which should be built up concurrently to the government investment in the construction of an industrial estate for the company KIA near Žilina. The agency regards the future development of the town and the region as positive in respect of this investment, which will bring new job opportunities, boost the purchasing power of inhabitants, and contribute to the budget income of the town.
- The agency regards the restructured loans and municipal obligations in 2004 as positive. The gradual spread of the loan burden over a longer period of time has created space for the town in 2004-2006 for its investment development, accompanied by the possibility to draw on EU funding and the support of domestic programmes requiring the financial participation of the town. Despite the fact that the town already adheres to the new budgetary rules set to acquire force from January 2005, regarding the drawing of new loans on a commercial basis the agency recommends preserving a prudent approach.
- The economic results of the town in 2003 ended with a surplus of SKK 12.558 million, which will be used to finance the development investments of the town in 2004, including projects assuming the participation of the town's finances. Even though the financial situation of the town compared with last year is more stable (shorter liability turnover period), the agency recommends continuing with the process of stabilisation of municipal finances and to focus on diversification of financial risks.
- In the area of managing subsidised organisations of the town, the agency can state the ongoing good supervision of their activities from the side of the Town Hall. Reserves still exist however, with regard to management of trading companies where the town has a holding. The agency therefore regards it as essential that the strategy of handling the stakes of the town is defined, and that quality monitoring of their economic results is carried out.
Please don't hesitate to address your questions to autner@slovakrating.sk, or call +421 2 5464 5151.
Slovak Rating Agency
Bratislava, 27 July 2004