Moody's rates Kosice A3

Moody's Investors Service said it assigned an A3 global scale local-currency rating to the Kosice Region and affirmed its national scale rating at Aa1.sk.

The outlook is stable.

The agency said the ratings are supported by a focused and disciplined fiscal policy applied by the current administration that, along with the new fiscal arrangements adopted in 2005, boosted Kosice's operating performance and by the settling down of the relatively young institutional framework for regional governments established in 2002 in Slovakia, which enhances the predictability and the stability of regional finances.

However, Moody's said the ratings are constrained by the weak financial prospects for the region's hospitals and a comparatively higher debt burden than other peers. These factors, together with constrained budget flexibility and an adverse macroeconomic framework, might challenge Kosice's operating performance in 2009 and beyond, the agency's said.

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