Moody’s lifts Ostrava view to positive

Moody's Investors Service said it changed to positive from stable the outlook on the City of Ostrava.

Moody's also said it affirmed the city's A2 long-term issuer rating.

The outlook change was driven predominantly by the city's improving operating performance and an expected decrease in the city's debt through 2017 thanks to manageable capital expenditure plans, the agency said.

Among other factors, Ostrava's improving operating performance is primarily supported by the current administration's commitment to increased control over operating expenditure and the efficient management of city-owned companies, Moody’s said.

In 2015, the city posted its highest operating surplus in recent history, recording a gross operating balance of 24% of operating revenues, the agency said.

The rating also reflects the city's increasingly solid operating margins and good overall financial performance, driven by conservative budgetary management, Moody’s said.

The city's moderate debt and comfortable liquidity are further important factors, the agency said.

The rating also considers Ostrava's above-average debt-service costs compared to peers, although these are manageable, Moody’s said.

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