The rating reflects our view of Lausanne's resilient economy, its solid operating performance, and its large portfolio of assets. Offsetting these factors are the city's high direct debt burden and high though reduced amount of unfunded pension liabilities. We expect its financing needs to increase in the near future, though they should remain moderate. As the economic center of the Canton of Vaud (AA+/Stable/--), Lausanne has diversified business sectors. While the city's population accounts for 18% of the cantonal total, it gathers 26% of Vaud's workforce. In our view, the canton has been quite resilient to the global economic crisis; in 2009, its GDP remained stable in real terms, compared with a 1.5% slump nationwide. In 2010, we expect Vaud's
