After lowering Croatia's rating on Friday, Moody's rating agency has downgraded the City of Zagreb's issuer rating to Ba1 from Baa3.
"Today's rating action follows Moody's recent decision to downgrade the sovereign bond rating of Croatia to Ba1 stable from Baa3 negative," the agency said in a statement.
The agency changed the outlook on the City of Zagreb from stable to negative as a reflection of the pressures stemming from its 100% owned company Zagrebacki Holding.
Moody's also lowered the rating for the Croatian Bank for Reconstruction and Development (HBOR) from Baa3 to Ba1, with a stable outlook, and placed on review for downgrade the Ba2 rating of the Croatian electricity company Hrvatska Elektroprivreda d.d. (HEP).
"Moody's will consider HEP's standalone credit profile in light of financial market developments in Croatia, the company's evolving liquidity profile, and its sizeable investment programme," said Nicholas Stevens, Moody's lead analyst for HEP.
