I. STATEMENT ON RATING
The Slovak Rating Agency TM confirms the rating for the Town of Partizanske in Slovak crowns and increases the rating in foreign currency as follows:
| Long-term koruna 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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The assigned long-term rating in the category of transactions in Slovak crowns of BBB (stable outlook) is 2 points lower than the rating of the state (A- stable outlook). In the category of foreign currency transactions the Town of Partizánske was assigned the rating of BB + (stable outlook). The short-term rating of the Town of Partizánske is S2, which is the best possible short-term rating for entities with a long-term rating of BBB.
Justification:
- The financial situation of the town is stable. The economic results of the town in 2003 ended with a surplus of SKK 25.113 million, which will serve to finance development investment objectives of the town in 2004, including those that project with the participation of own funding. The generated surplus of the town will also serve as a financial reserve to cover unforeseeable events. In the area of schooling the town covers the deficit in funding from the state using its own resources. The agency regards as positive the efforts of the town to introduce rationalisation measures, as well as its endeavour to acquire funding from various grant schemes for the financing of key investment priorities in the area of schooling.
- Regarding strategic planning, the town is preparing the elaboration of its basic development document, which will define the development priorities of the town, as well as specific activities and resources required to achieve them. The agency positively assesses the fact that the city is endeavouring to acquire a grant from the EU worth SKK 450,000 for the project to compile such a document. If the town fails to acquire the grant, the project will go ahead with its own funding. Until the document is elaborated, the town will follow the priorities determined for the current period of office in three key areas: development of business, housing construction and support for sport.
- At the present time the town is drawing on a loan under commercial conditions, the balance of which as of 31 March 2004 was SKK 6,680,000. Even if it were to draw on a loan from the housing support fund FRB in 2004 worth a planned SKK 8.053 million, the loan burden of the town would still be on a safe level in the opinion of the agency.
- The agency perceives a certain lack of certainty from the external environment due to the prepared tax reform and the new system of communal sector financing.
Please don't hesitate to address your questions to autner@slovakrating.sk, or call +421 2 5464 5151.
Slovak Rating Agency
Bratislava, 01 June 2004