The Italian City of Milan's budgetary performance is affected by dwindling operating revenues and ambitious investments over 2010-2012, which we expect to lead to operating deficits. However, we anticipate that Milan's liquidity will remain strong. We are affirming our long-term rating on the city of Milan at 'A+'. The negative outlook reflects the deterioration of Milan's budgetary performance and debt increase in recent years. This trend is expected to continue. On Oct. 4, 2010, Standard&Poor's Ratings Services affirmed its 'A+' long-term issuer credit rating on the Italian City of Milan. The outlook is negative. Milan's rating reflects the city's currently very strong cash holdings coupled with our expectation that liquidity will remain adequate during the next few years.
