Moody's cuts Puchov view to negative

Moody's Investors Service said it revised the outlook on the city of Puchov's national scale issuer rating to negative from stable. The Aa1.sk rating was affirmed.

The action was driven by the city's ongoing ambitious capital spending, which is likely to incur new debt despite Moody's expectations that the city's financial exposure will stabilize after vast investments during the past two years.

The agency said Puchov's capital spending peaked at 36% of total expenses in 2006, exerting substantial pressure on the city's budget and doubling its debt stock.

Despite such a dramatic surge in the city's financial exposure, Moody's said debt service estimates appear to remain manageable, varying below 4% of operating revenue between 2008 and 2010.

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