Fitch changes outlook for Bucharest’s rating in line with country rating

International rating agency Fitch has revised the outlook of Bucharest's Issuer Default Ratings (IDR) for long-term debt from stable to negative while keeping the rating at 'BBB-'.

The same action was taken for the debt of Bucharest's District 5 and of other Romanian municipalities (Brasov, Oradea, and Buzau).

The outlook revision follows a similar action on Romania's sovereign rating.

"Bucharest's rating is capped by that of Romania (BBB-/Negative) as our assessment of the city's standalone credit profile (SCP) is unchanged at 'bbb+' since the last review on January 10, 2020," the rating agency said.

Some 37 bond issues of Romanian municipalities, totaling RON 3.3 billion (EUR 680 million) and with maturities of 5 to 20 years, are traded on the Bucharest Stock Exchange (BVB).

The city of Bucharest has bond issues listed on the Bucharest Stock Exchange worth RON 2.2 bln (EUR 460 mln), representing two-thirds of the total value of municipal bonds.

The four issues launched by the city of Bucharest, of RON 555 mln (EUR 115 mln) each, have yearly coupons between 3.58% and 5.6% and maturities of 5 to 10 years.

The value of these bonds represents over half of the revenues of RON 4.2 bln that the Bucharest City Hall had in 2018.

(Photo: Shutterstock)