Very positive liquidity position and healthy cash management. Strong and wealthy economy. Still-adequate financial flexibility, despite the 2012 changes to taxes and tariffs. Modest, albeit positive, operating performance. High direct debt burden and tax supported debt. The rating on Milan primarily reflects our long-term rating on the Republic of Italy (unsolicited BBB+/Negative/A-2). We cap the rating at the level of the long-term rating on Italy because the city does not satisfy all the criteria that would allow it to be rated above the sovereign (see "Methodology: Rating A Regional Or Local Government Higher Than Its Sovereign," published Sept. 9, 2009, on RatingsDirect on the Global Credit Portal). Among other factors, we think Milan would not maintain stronger credit characteristics than
