Moody’s downgrades Zagreb

Moody’s Investors Service said it downgraded the city of Zagreb’s issuer rating to Ba2 from Ba1.

The outlook remains negative.

The downgrade follows a recent similar downgrade the sovereign bond rating of Croatia to Ba2 from Ba1, Moody’s said.

The downgrade of the city reflects the close financial and operational linkages between the state and local governments in Croatia, the agency said.

Zagreb is highly dependent on intergovernmental revenues in a form of shared taxes and central government transfers, representing more than 70% of operating revenues in the past few years, Moody’s said.

In addition, Zagreb’s wealthy status among Croatian cities exposes the city to adverse decisions from central government either aimed at redistributing resources to other cities or to contribute achieving fiscal consolidation, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.