The rating primarily reflects the favorable institutional framework for municipalities located in the Canton of Vaud, including Lausanne, and the city's wealthy economy. Its financial management is highly likely to sustain solid budgetary performance, despite limitations to its budgetary flexibility, very high debt burden, and less-than-adequate liquidity. In our view, Lausanne continues to benefit from a wealthy and diversified economy, with strong health and education sectors and very high GDP per capita of more than $68,000 in 2016 (Vaud cantonal level data). Vaud's GDP grew 1.4% in 2016, slightly above that of Switzerland (1.3%), and we expect this to continue through 2019. This fuels the city's tax revenues, which account for about 30% of its operating revenues. We expect the
