Fitch Affirms Romanian City of Bucharest at 'BBB-'; Outlook Stable

Fri Jan 31, 2014 11:32am EST

FRANKFURT/BARCELONA/LONDON, January 31 (Fitch) Fitch Ratings has affirmed the Romanian City of Bucharest’s Long-term foreign currency Issuer Default Rating (IDR) at ‘BBB-’, its Long-term local currency IDR at ‘BBB’ and its Short-term foreign currency IDR at ‘F3’. The Outlooks on the Long-term IDRs are Stable. The senior unsecured rating of the city’s outstanding EUR500m bond (ISIN XS0222425471) has also been affirmed at ‘BBB-’. KEY RATING DRIVERS The affirmation reflects Bucharest’s capital status, including being the economic and administrative centre of Romania. The ratings also reflect its above-national average wealth levels, its strong operating performance and its sound debt coverage. They further reflect the city’s high refinancing risk through a bond maturing in 2015, uncertainties over its contingent liabilities and its exposure to the euro exchange rate. The Stable Outlook reflects Fitch’s expectations that Bucharest will extend its sound budgetary performance, including healthy debt ratios since it has no plans to increase debt in 2014. Fitch assumes real GDP growth to continue in 2014. Bucharest faces large refinancing risk from its EUR500m eurobond maturing on 22 June 2015. The city plans to borrow bank loans to refinance the bullet repayment.International Local and Regional Governments Rating CriteriaAdditional Disclosure Solicitation StatusALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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