Fitch Upgrades Polish City of Katowice to .A-.; Outlook Stable
Fitch Ratings-London/Warsaw/Moscow-19 November 2007: Fitch Ratings has today upgraded the Polish City of Katowice.s Long-term foreign currency rating to .A-. (A minus) from .BBB+..
Following the upgrade the Outlook is now Stable. This action follows yesterday.s upgrade of the Republic of Poland.s foreign currency Issuer Default rating (.IDR.) to .A-. (A minus) from .BBB+. (See announcement dated 18 January 2007, www.fitchratings.com), as the foreign currency rating of the city was previously constrained by the Sovereign rating. Its Long-term local currency rating is affirmed at .A-. (A minus) with a Stable Outlook. .
The ratings reflect Katowice.s sound budgetary performance, prudent debt policy and high liquidity. However, the ratings take into account the city.s rigid expenditure including education, which is its most costly expenditure item, and the healthcare sector.s high liabilities, creating high indirect risk.
The Stable Outlook indicates that Katowice.s credit fundamentals will remain solid, supported by high current margins in the long term. Katowice, with around 320,000 inhabitants, is one of the largest cities in Poland. The city is the capital of the Slaskie voivodship (or region) . the second-wealthiest and most highly industrialised region in Poland. In 2002 the region.s per capita gross regional product was 10.8% higher than the national average of PLN20,431. The region contributes 13.7% of national GDP.
