Moody's rates Zagrebacki bonds Baa2

Moody's Investors Service said it assigned a Baa2 foreign-currency rating, with stable outlook, to Zagrebacki Holding d.o.o.'s planned bond offering of up to €300 million.

The Baa2 rating is supported by the city of Zagreb's control over the issuer's management and spending and the city's track record in supporting its operations and development, Moody's said. The company also benefits from projections of substantial operating surpluses.

The rating is constrained by tariff and collection issues, the company's highly depreciated asset structure and large exposure to foreign currency risk, the agency said. The company also could see a lag in improvements from cost cutting.

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