Fitch Ratings-London/Barcelona-28 November 2008: Fitch Ratings has today affirmed the City of Pamplona's Long-term foreign and local currency ratings at 'AA-'(AA minus), respectively, and its Short-term foreign currency rating at 'F1+'. The Outlooks on both Long-term ratings remain Stable. The ratings reflect the city's status as the political capital of the region of Navarre, which is an autonomous community with extensive tax-setting power, and its main economic and administrative centre. The ratings also take into account the city's low financial debt, low tax burden, its above national average socio-economic profile, as well as the sound cash position over recent years. The Outlooks remains Stable even though Fitch has some concerns about the impact of the ongoing national economic slowdown on the city's transfer revenue growth, which would, in turn, impair the current balance of the city. In 2007, Pamplona decided to conduct an ambitious investment effort focused on urban improvement with its capital expenditures level almost doubling from their 2006 to EUR183m in 2007. The investment programme benefited from substantial co-funding and consequently, financial debt only rose by EUR12m to reach EUR60.1m, while in the last five years, financial debt had been relatively stable, at around EUR50m. Despite having a weak current margin (3.8% in 2007), the low level of debt allows the city to post a comfortable debt coverage ratio, the debt payback being of 6.3 years in 2007. Besides, the debt management is quite conservative with a long debt profile and annual debt repayment limited at about EUR3.5m in the next ten years. Despite recording weak operating balances, debt servicing only absorbs about half of the city's operating balance due to Pamplona's very conservative debt management. Furthermore, Pamplona benefits from ample cash reserves, which at end-2007 exceeded EUR73m, the equivalent of almost 47% of its 2007's operating expenditure. Pamplona is the political capital of the autonomous community of Navarre, one of Spain's 17 autonomous communities. At only 23.8 square kilometers, Pamplona is small compared to other Spanish cities. Nevertheless, Pamplona is an important political, administrative and economic centre, and is nationally recognized for research in the medical sector. With around 194,890 inhabitants registered as of 1st January 2007, it represents 32.5% of the population of Navarre. Contact: Guilhem Costes, Barcelona, Tel: + 34 93 323 8410. Media Relations: Peter Fitzpatrick, London, Tel: + 44 (0)20 7417 4364, Email: peter.fitzpatrick@fitchratings.com. Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site. Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=AhwCpQQ0pWKzJrCNi%2Bzc7w%3D%3D. You can use this link on the day this article is published and the following day.
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