S&P affirms Brno

Standard & Poor's said it affirmed its A- long-term and A-2 short-term issuer credit ratings on the Czech City of Brno.

The outlook is stable.

S&P said that the ratings are supported by Brno's strong operating performance and sound liquidity position, as well as by the increasing inflow of investments following the E.U. accession of the Czech Republic (foreign currency A-/positive/A-2, local currency A/positive/A-1) in May 2004.

The ratings also reflect, however, the city's relatively high debt burden, with bullet maturities and foreign currency exposure, the agency noted.

Moreover, unemployment is still higher and wealth levels are lower than the national averages, despite recent positive trends in both indicators, S&P added.

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