On Aug. 20, 2003, Standard&Poor's Ratings Services lowered its long-term issuer credit and senior unsecured debt ratings to 'A+' from 'AA-'on the City of Lausanne, located in the Swiss Canton of Vaud (A/Stable/--). The outlook is stable. The rating action reflects weakening budgetary performance, an increasing debt burden, expenditure pressure from the canton, and decreasing coverage ratios in its pension fund CPCL. The ratings are underpinned by the city's strong service-oriented economy, good liquidity, and a certain degree of fiscal flexibility, although the latter is declining. The following factors constrain the ratings: Weakening budgetary performance despite efforts to achieve some consolidation by 2004. Lausanne closed its 2002 accounts below expectations with significant tax revenue shortfalls. The 2003 budget
