Fitch: Bucharest municipality standalone rating constrained by sovereign rating

International rating agency Fitch has affirmed its ratingfor the long term debt of Bucharest municipality (IDR) local and foreign currency at BBB- with a negative outlook.

However, Fitch assesses Bucharest's Standalone Credit Profile (SCP) at bbb+. The city's operating performance and debt ratios will remain in line with BBB+ rated peers over the medium term.

However, the city's ratings are constrained by the sovereign ratings - the rating agency explains. Fitch thus assesses Bucharest's Standalone Credit Profile (SCP) at bbb+, which results from a 'low midrange' risk profile and 'aa' debt sustainability. The latter is derived from a debt payback at the upper end of the 'aa' category and moderate debt levels corresponding with the 'aa' category.

The SCP also factors in the city's favourable comparison with national and international peers in the same rating category. The city's IDRs are not affected by any other rating factors but are constrained by the sovereign's IDR.

(Photo: Shuttersock)