Research Update: Italian Region of Campania 'BBB-' Rating Affirmed; Outlook Stable

Campania's financial management has successfully tightened health care costs with the help of the central government, reduced supplier debt in the health care sector, and cleaned up its high level of receivables and payables since 2011. We expect an improvement in Campania's budgetary performance in accrual terms, although we also factor in the recent increase in Campania's operating payables. This is partly a result of a delay in cashing in transfers from the central government, but also due to insufficient revenue collection. We continue to assess Campania's financial management as weak because we believe the region still needs to make further progress to overcome a history of substandard financial practices. We are affirming our long-term rating on the Region of

... tightened health care costs with + the help of the central government, reduced supplier debt in the health care sector, and cleaned up its high level of receivables and payables since 2011. We expect an improvement in Campania's budgetary performance in accrual terms, + although we also factor in the recent increase in Campania's operating payables. This is partly a result of a delay in cashing in transfers from the central government, but also due to insufficient revenue collection. We continue to assess Campania's financial management as weak because we believe + the region still needs to make further progress to overcome a history of substandard financial practices. We are affirming our long-term rating on the Region of Campania at '###-'. + The stable outlook on Campania reflects our expectation that the region will + continue to perform in line with our base case, which assumes a gradual improvement of the region's budgetary metrics...

Research Update