Moody's downgrades Krompachy

Moody's Investors Service said it downgraded the Slovakian City of Krompachy's national scale rating to Aa3 from Aa2.

The outlook is stable.

The agency said the downgrade is in response to the anticipated abrupt increase in the city's debt exposure and its negative impact on the small and constrained budget. Krompachy's debt is expected to rise to 65% of operating revenue in 2011, from 12% in 2009, because of a housing project.

Subsequent to the downgrade, Moody's is also withdrawing Krompachy's Aa3 rating for its own business reasons.

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