Rating

Credit rating determines the economic quality of the entity, its ability to repay all of its debts on time and in full. It is carried out by independent rating agencies which express their final assessment in the form of a credit rating grade from a rating scale. Assigning long-term rating also includes the assignment of an outlook that determines the future direction of the rating, usually in the medium term. The rating can affect the prices of resources (bonds, notes, loans) that an entity can obtain on the financial markets.

 The creditworthiness assessment of the City of Ostrava has been carried out since 1996. Over the years, Ostrava has been rated by two independent global rating agencies, Moody’s and Standard & Poor’s. Currently, it is Moody’s who rates Ostrava.

Ostrava has been rated by Moody’s since 1997. In 1997–2001, the rating was first carried out on debt securities. Since 2002, Ostrava has also been included in the issuer rating. The awarded rating grade has seen an upward trend over the years, i.e. the city has worked its way from Baa1 rating to its so far highest grade of Aa3 (see table).

Table Development of Ostrava’s rating in 2002–2024

In June 2024, Moody’s affirmed the City of Ostrava’s current Aa3 rating with a stable outlook based on a detailed review of the City’s performance over the past year, its current financial position, financial outlook and taking into account the environmental, social and governmental risks.

The Aa3 rating of the City of Ostrava reflects the following factors:

₋         track record of very good operating performance, further supported by the national tax sharing mechanism,

₋         abundant liquidity fully covering city´s indebtedness,

₋         decreasing debt levels in 2024 – 2025,

₋         decline in local population mitigated by remediation policies, which will take time to be effective,

₋         pressure on financial performance stemming from investment requirements.

The rating outlook is stable – it reflects the city´s capacity to preserve solid operating performance, high liquidity, and moderate to low debt levels over the medium term.

The city of Ostrava thus achieved the highest possible rating, which is identical with the rating of the Czech Republic (Aa3 with a stable outlook). The city of Prague and Brno achieved the same rating, which results from the rating assessments currently published on the website of the Moody's agency.

Table Credit rating of selected entities