BELGRADE (Serbia), February 20 (SeeNews) - Serbia's capital Belgrade needs to invest more in improving its public transport whose development also depends on reforming the current legislative framework, credit agency Moody's said in a periodic review of the city's ratings.
"The credit profile of City of Belgrade (Ba3) reflects its prudent fiscal management, which results in healthy operating performance and enhanced self-funding capacity. The rating also reflects Belgrade's declining debt levels and manageable debt servicing costs, comfortable liquidity position and its crucial role in the national economy," Moody's said in a statement earlier this week after the completion of the periodic review, which did not involve a rating committee.
"At the same time, the rating takes into account the city's high investment requirements, associated with the pressure stemming from the transport company and limited financial flexibility under the current legislative framework. Credit challenges include the declining debt levels having, however, moderate indirect exposure, and limited revenue and spending flexibility," the statement reads.
Moody's also said that that Belgrade's credit profile benefits from the agency's assessment of a strong likelihood of extraordinary support from the Serbian government (Ba3 positive) in case the issuer were to face acute liquidity stress.
The period review does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future, Moody's noted.
"Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement," it added.