S&P lifts Lodz to BBB+

Standard & Poor's said it raised the long-term issuer credit rating of the Polish City of Lodz to BBB+ from BBB.

The outlook is stable.

The agency said the upgrade follows the city's consistently improving operating balances, its low debt burden and management's commitment to maintain sound financial indicators. Since 2002, the city's budgetary performance has been on an improving trend, shifting from a negative operating balance ratio of 4.2% to a surplus of 11.9% in 2006, S&P said, and the deficit after capital expenditures as a proportion of total revenues has also declined considerably to 1.8% in 2006 from 10.5% in 2002.

The ratings remain constrained, however, by increasing borrowing by non-self-supporting municipal companies, by the city's low financial flexibility and by its substantial investment requirements, which are common to all Polish cities, S&P said.

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