(Source: Info-Prod Research (Middle East))Moody's Investors Service has assigned Aa2 ratings to Fukuoka Prefecture's Series 6 JPY 10 billion bond due 2014. The rating outlook is stable. The agency stated that the rating reflects a stable national operating environment for local and regional governments and a protective institutional framework. The stable environment minimizes the risk of an economic, financial market or political crisis, while the institutional framework contributes to credit strength through the central government's oversight of local government performance and its provision of fiscal transfers that reduce fiscal disparities. The rating also reflects that, like nearly all local governments in Japan, Fukuoka Prefecture has high debt ratios when compared internationally. But these ratios are relatively low for a Japanese local government and, in contrast to many of its peers in Japan. In June 2007 Fukuoka Prefecture implemented a fiscal reform plan to reduce staff and related costs, streamline operations and cut spending on capital investments and social security costs. The prefecture has been adversely affected by the current economic slowdown, like the rest of Japan and the world. While its fiscal situation, including local tax revenues and expenditures sensitive to an economic cycle, has come under pressure, Fukuoka continues to make efforts to improve its fiscal profile, following its reform plan. Moody's expects this disciplined approach to remain in place. Fukuoka Prefecture is one of 47 prefectures in Japan, located in Kyushu. It has a population of 5.1 million and GDP of JPY 18.1 trillion, according to the most recent statistics. Moody's last rating action with respect to the Fukuoka Prefecture was taken on July 28, 2009, when Moody's re-aligned 13 Japanese RLGs' ratings to Aa2, the same level as the Japanese sovereign rating.

Originally published by Info-Prod Strategic Business Information.

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