The rating on Milan primarily reflects our long-term rating on the Republic of Italy (unsolicited BBB+/Negative/A-2). We cap the rating at the level of the long-term rating on Italy because the city does not satisfy all the criteria that would allow it to be rated above the sovereign (see "Methodology: Rating A Regional Or Local Government Higher Than Its Sovereign," published Sept. 9, 2009, on RatingsDirect on the Global Credit Portal). Among other factors, we think Milan would not maintain stronger credit characteristics than the sovereign in a stress scenario. Also, as with any other Italian city, Milan lacks sufficient financial autonomy to oppose sovereign interventions such as the abolition of local taxes or, more generally, a change in the
