Moody's lifts Zagreb, Zagrebacki views to positive

Moody's Investors Service said it changed the outlook of the city of Zagreb and its 100%-owned utility company, Zagrebacki Holding DOO, to positive from stable.

Moody's also said it affirmed the Ba2 long-term issuer ratings of both entities.

The ratings reflect the improvement in the operating environment for Croatian sub-sovereigns, the agency said.

The ratings also consider the city's good budgetary management and sound financial fundamentals, which have ensured a high self-funding capacity and a low direct debt burden, Moody's said.

Moody's noted a significant improvement in the city's operating performance with gross operating balance at 11% of operating revenue in 2018, compared with 3% in 2017.

The agency said it expects the city will post a good financial performance in 2019 through 2020, thanks to its expanding revenue base and prudent appetite for capital expenditure and infrastructure funding opportunities.

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