On Aug. 11, 2003, Standard&Poor's Ratings Services affirmed its 'AA' long-term issuer credit rating on the Italian City of Milan. The outlook is negative. The rating is based on Milan's strong, diversified economic base, expected improved operating balances, and expected low deficits before debt retirement over the next three years. Milan's high potential revenue flexibility and valuable assets are also positive rating factors. The rating is constrained by the city's heavy debt burden. Milan is Italy's second-largest city, with 1.2 million inhabitants. It is the leading manufacturing and financial center in the country, contributing more than 10% of national GDP, although accounting for only 2% of the population. Its wealth indicators are substantially above the national and European
