I. STATEMENT ON RATING

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

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 one degree 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 Prešov, which is one degree below the risk level of the Slovak Republic. Short-term rating of City Prešov 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 based on the partnership between the private and public sector. Strategic plan with defined 36 strategic targets for the city is focussed on four areas - business development, external investments, human resources and living conditions.
  
  
• One of the targets of the strategic plan of economic development is the establishment of technological incubator centre in the city. This task should be performed by the Regional consulting and information centre Prešov, the member of which is also the city Prešov. The establishment of incubator in the city will support the business environment in the city, mainly the new entrepreneurs and will contribute to creating of new working possibilities. Establishment of the incubator will be financed by PHARE, some funds necessary for development of the project documentation will be provided by the city Prešov.
  
  
• Financial situation of the city is stable, which is result of good financial management. The volume of available funds of the city increases on year-on-year basis, Available funds achieved the amount of SKK 146,4 million as of ultimo of 2001, which represented 37 % of current assets of the city. The volume of available funds guarantees the instantaneous liquidity of the city.
  
  
• The city is the centre of various institutions operating in the area of economic development within the city, creating so conditions for business development. The city supports sports, cultural as well as educational activities in a large extent, and so contributes to enhancement of life of inhabitants living in the city.

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