Scope Ratings reviews its ratings either yearly, or at least every six months in the case of sovereign, sub-sovereign and supranational issuers. Monitoring reviews are unrelated to the calendar that outlines public finance rating actions.

Scope performs monitoring reviews to determine whether outstanding ratings remains proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology, latest developments, and the rated entity’s financial and operational aspects relative to similarly rated peers; or through targeted reviews on an individual credit. Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for the City of Milan (BBB+/Negative; S-2/Stable) on 23 March 2021. This monitoring note does not constitute a rating action nor indicates the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated rating history can be found on www.scoperatings.com.

Key rating factors

The BBB+ rating reflects Milan’s strong individual credit profile, underpinned by high budgetary reserves and large own cash holdings stemming from effective governance and sound financial management, and by its high wealth levels and strategic importance as Italy’s economic and financial hub. These factors, combined with a supportive institutional framework help compensate for the significant revenue loss and pressure on municipal finances caused by the Covid-19 economic shock. Credit challenges relate to Milan’s high but declining debt stock, limited revenue flexibility, as well as sizeable, yet manageable, contingent liabilities. The Negative Outlook reflects the weakening of Italy's credit profile as captured by the Negative Outlook on the Republic of Italy’s BBB+ rating.

The methodology applicable for the reviewed rating(s) and/or rating Outlook(s) (Rating Methodology: Sub-Sovereigns, 18 May 2020) is available on https://www.scoperatings.com/#!methodology/list.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Jakob Suwalski, Director

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