RATING REPORT

The Slovak Rating Agency hereby assigns the Bratislava District of Petržalka the following rating:

Long-term domestic currency rating	BBB+ (stable outlook)
Long-term foreign exchange rating	BBB (stable outlook)
Short-term rating	S2

The Bratislava District of Petržalka was assigned the long-term rating of BBB+ (stable outlook) in the category of Slovak koruna transactions, which is 1 level below the risk level of the State. In the category of transactions in foreign currencies, the Bratislava District of Petržalka was assigned the rating of BBB (stable outlook). The short-term rating of the city district is S2, which is the best possible short-term rating for entities with a long-term rating of BBB+.

Justification:

• The Bratislava District of Petržalka, which is the largest city district of the Slovak capital, is part of Bratislava County in the southwest of Slovakia. From a political and administrative perspective, it makes up the Bratislava V zone together with another three city districts (Rusovce, Jarovce, Čunovo). As of 31.12.2002 a total of 116,209 people lived in Petržalka, which accounts for 19.38% of the inhabitants of Bratislava County. The territory where Petržalka is located boasts a rich history. At the present time Petržalka is a modern residential scheme, and is also home to the principal office of the foreign trade company Technopol, the congress centre Incheba, the Economic University, and houses the registered offices of numerous businesses. It has good economic and trade potential, which is favourably reflected also in the revenue side of its budget (income from property tax).
  
  
• The strategic development of Petržalka is directed at increasing the quality of life in the district. One of the priorities is to build up relaxation and recreational zones of city-wide importance. The fundamental orientation of the development of the city district is based on existing potential. Petržalka has several projects prepared, the financing of which will depend also on the allocation of funds from grant schemes.
  
  
• The system of internal management, inclusive of financial management, is of a high standard under the conditions of the district administrative office. The comprehensive information system acts as a support tool for internal management, providing a high standard of information, which the agency regards as positive. The city district is the only autonomous unit in Slovakia to possess a financial control module as part of an automated system of bookkeeping.
  
  
• The financial management of the city district has been stable over the long term. In the period 2001-2003 the district ended with a surplus. To the end of 2003 it reported a surplus of SKK 20,485,000. Short-term liabilities of the city district to the end of 2004 were covered 18-fold by the volume of available sources. The approach of Petržalka with regard to drawing credit for financing its investment objectives is conservative. In terms of the handling of available financial resources, the agency recommends diversifying bank institutions with which the city district co-operates.
  
  
• The agency perceives a certain uncertainty in the external environment in relation to the prepared fiscal decentralisation. If the transfer of property tax via the capital is approved, the payment ability of the city district will be partially influenced by the payment ability of the capital city and the time span for the provision of the transfer. In the opinion of the agency, at the present time the city district has sufficient financial reserves created for it to be able to cover any eventual adverse periods arising upon the transfer of property tax.

Please don't hesitate to address your questions to autner@slovakrating.sk, or call +421 2 5464 5151.

Slovak Rating Agency
Bratislava, 14 September 2004