I. STATEMENT ON RATING
Slovak rating agency granted following ratings to City Sereď:
| Long-term local currency rating | BBB- (stable outlook)
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| Long-term foreign currency rating | BB (stable outlook)
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| Short-term rating | S2
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In the category of transactions in Slovak crowns, long-term rating BBB- (stable outlook) has been granted to the city Sereď. In the category of transactions in foreign currencies rating BB (stable outlook) has been granted to the City Sereď. Short-term rating of Sereď is S2, which is the best possible short-term rating for the entities attaining long-term rating BBB-.
Rationale:
- From the political and administrative point of view, city Sereď is a part of the district Galanta associating 35 municipalities. With the population of 17 406 inhabitants as of May 26, 2001 the city Sereď ranks to the smaller Slovak cities. Companies within the city are represented by Slovak as well as foreign capital and operate mainly in both food and machine industries as well as in building sector.
- Total financial management of the city is appreciated as stable during the elapsed time period. Within 1999-2002, the city showed stable surplus, the structure of budgeted revenues of the city is sufficiently diversified and the city indebtedness is low. Grants and transfer are represented in budgeted revenues in a large extent as well (the accepted grants-to-total revenues ratio represented 20% as of ultimo of 2001), which documents the successfulness of the city in acquiring them. In 2002, drawn capital grants represented almost 38 % on capital revenues of 2002.
- Within the strategic area, we see opportunities especially in the absence of long-term development conceptions of the city. In our opinion, strategic documents concerning the city development should be based not only on current but also on future possibilities of the city, but they also should consider financing of city needs from pre-accession and post-accession EU funds. Processing of strategic documents of city development should be realised under active participation of representatives of business, tertiary, as well as communal sphere and public.
- City has well developed system of internal regulations and standards governing the primary functions of the city. We positively see making them available for public on a Web page, however, in our opinion, insufficient update of some of them seems to be deficiency.
- In the area of internal management, in our opinion, it is necessary to strengthen the area at lower levels, whereby there will be more space for performing control activities at higher management level. However, we see positively further development of information system and establishment of digital map.
- In the environment area serious persistent problem seems to be the air pollution arising during nickel ore processing by the former company Niklová hu Sereď (nickel smeltery). The mentioned polluter has been classified by the government body as a small air pollution generator. Sereď wants to solve this problem more rapidly, with government participation in financial support as well as providing environmental know-how. The city exerts activities concerning provision of finance from EU funds and professional international cooperation possibilities.
Please don't hesitate to address your questions to autner@slovakrating.sk, or call +421 2 5464 5151.
Slovak Rating Agency
Bratislava, 30 September 2003