I. STATEMENT ON RATING

Slovak rating agency, Inc. grants following rating to City Humenné:

Long-term local currency rating	BBB (stable outlook)
Long-term foreign currency rating	BB    (stable outlook)
Short-term rating	S2

The granted long-term rating in the category of transactions in Slovak crowns BBB (stable outlook) is two degrees below the rating of the Slovak Republic (A - stable outlook). In the category of transactions in foreign currencies rating BB (stable outlook) has been granted to City Humenné, which is two degrees below the risk level of the Slovak Republic. Short-term rating of City Humenné is S2, which is the best possible short-term rating for the entities attaining long-term rating BBB.

Rationale:

• The city, as one of four cities in Slovakia, took part in the USAID project provided by the consultants of the Czech-American company Berman Group and representatives of Academia Istropolitana Nova. The goal of this project was development of the strategic plan of economic development of the city with defined 30 strategic targets. Strategic plan is focussed on three areas - enhancement of conditions for investors, enhancement of availability of the city and development of small and middle enterprises. Within this project, an important document called City profile has been developed, which contains all relevant information on the city and represents so complex study on the city for potential investors.
  
  
• Establishment of industrial park continues to be the primary strategic targets of the city that will contribute to increase of employment rate within the city. Industrial park project Gutmanovo is close to be finalised, which is shown by the fact that the industrial park building will start in April 2003. The city has concluded agreements with foreign investors that will operate in the mentioned industrial park. In November 2002, complete documentation concerning the industrial park has been submitted to the Ministry of building and regional development of the Slovak Republic.
  
  
• The development of financial situation of the city is stable. The city shows stable surplus in the local management representing financial reserves necessary for realisation of development programs and successful coping with unpredictable situations. The volume of available funds guarantees instantaneous liquidity of the city. The available funds represented the amount of 71,305 million as of ultimo of 2001, which means that short-term liabilities and debt service of the city have been covered 8 times as of ultimo of 2001. Indebtedness indicator was of low value, liabilities indebtedness achieved 1,40 % as of ultimo of 2001, and revenue indebtedness reached the value of 6,66 % as of ultimo of 2001. According to the new budget regulations, the service-debt-to-current-revenues ratio will represent 2,32 % for the year 2003, which means that at present the city keeps the principle of covering of current expenditure by current revenues.
  
  
• We highly appreciate the implementation of city information system providing name of streets and organisations in the city together with linkage to Web pages. Establishment of an information centre at the railway station will represent a part of this system providing visitors with various information on the city, its surroundings, business opportunities, as well as transportation, accommodation and tourist possibilities.
  
  
• In the part, the city realised a lot of various investment activities contributing to the enhancement of life of inhabitants living in the city. Realised investments have been financed by using own sources of the city, grants from companies operating within the city and transfers from public finance, so without affecting the indebtedness of the city. The information mentioned above proves a good cooperation with business area.

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

Slovak Rating Agency
Bratislava, 10 December 2002