(Repeat for additional subscribers)
July 25 (The following statement was released by the rating agency)
Fitch Ratings has assigned the State of
Bremen's EUR250m floating-rate bond (DE000A11QJY9), due 1 August 2016, an
expected Long-term local currency rating of 'AAA(EXP)'. This is Bremen's fourth
issue to be rated by Fitch. The senior unsecured issue ranks pari passu with all
Bremen's other outstanding debt.
The final rating is contingent upon the receipt of final documents conforming to
information already received.
KEY RATING DRIVERS
The rating reflects the strong mutual support mechanisms that apply to all
members of the German Federation, including the State of Bremen, and the
extensive liquidity facilities they benefit from, which ensure timely debt and
debt service payment.
Fitch notes that the support mechanisms apply uniformly to all members of the
German Federation: the Federal Republic of Germany (AAA/Stable/F1+) represented
by the federal government (Bund) and the 16 federated states, which includes the
State of Bremen 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 State of Bremen is located in northern Germany and had a population of about
663,300 inhabitants at end-2013. The city-state is the smallest of the 16 German
states and consists of the cities Bremen and Bremerhaven. Its EUR28.6bn GDP
accounted for 1% of national GDP in 2013. Its GDP per capita of EUR43,085 is the
second highest among the German states and 29% above Germany's average of
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
A downgrade of the sovereign ratings could lead to a downgrade of the Laender.
An adverse change of an important institutional feature (solidarity principle,
equalisation system, liquidity exchange mechanism) would result in a review of
the Laender's ratings.