May 27, 2014 / 3:25 PM / 3 years ago

Fitch Assigns Thuringia's EUR250m Bond Final 'AAA' Rating

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: State of Thuringia here FRANKFURT/PARIS/LONDON, May 27 (Fitch) Fitch Ratings has assigned Thuringia's EUR250m 1.125% fixed rate bonds (DE000A11QS31), due 26 May 2021, a final Long-term rating of 'AAA'. This is Thuringia's fifth issue to be rated by Fitch. The senior unsecured bond ranks pari passu with all Thuringia's other outstanding debt. KEY RATING DRIVERS The rating reflects the strong support mechanisms that apply to all members of the German Federation, including the State of Thuringia, and the extensive liquidity facilities they benefit from, which ensure timely debt and debt service payment. The support mechanism applies uniformly to all members of the German Federation: the Federal Republic of Germany (AAA/Stable) represented by the federal government (Bund) and the 16 federated states, which include the State of Thuringia undertaking this issue. All Laender are equally entitled to financial support in the event of financial distress irrespective of differences in economic and financial performances. The new EUR250m issue's liquidity is underpinned by the safe cash management system the Laender operate in, which allows overnight cash exchanges between Laender and the Bund when necessary, and recourse to appropriate short-term credit lines. The issue is zero risk-weighted and European Central Bank repo-eligible. Thuringia is located in eastern Germany and had a population of about 2.2 million at end-2013. Its capital is the City of Erfurt. Its GDP of EUR51bn accounted for almost 1.9% of national GDP in 2013. Its GDP per capita of EUR23,168 is about 30% below Germany's average of EUR33,355. The unemployment rate was 8% in April 2014, above that of Germany (6.8%) but well below that of eastern Germany (10%). RATING SENSITIVITIES A downgrade of the sovereign ratings could lead to a downgrade of the Laender and consequently the bond's rating. An adverse change of an important institutional feature (solidarity principle, equalisation system, liquidity exchange mechanism) would result in a review of the German Laender ratings. The New Issue Report is available at www.fitchratings.com. Contacts: Primary Analyst Guido Bach Senior Director +49 69 768076 111 Fitch Deutschland GmbH Taunusanlage 17, 60325 Frankfurt am Main Secondary Analyst Nilay Akyildiz Director +49 69 768076 132 Committee Chairperson Christophe Parisot Managing Director +33 1 44 29 91 34 Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com. Additional information is available at www.fitchratings.com. Applicable criteria 'Tax-Supported Rating Criteria', dated 14 August 2012, and 'International Local and Regional Governments Rating Criteria', dated 23 April 2014, are available at www.fitchratings.com. Applicable Criteria and Related Research: Tax-Supported Rating Criteria here International Local and Regional Governments Rating Criteria - Outside the United States here Additional Disclosure Solicitation Status here ALL 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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