Fitch affirms Oradea and Brasov ratings at ‘BBB-‘, with stable outlook

Fitch Ratings has affirmed Romania’s Oradea long-term foreign and local currency Issuer Default Ratings (IDRs) at 'BBB-' and short-term foreign currency IDR at 'F3', with stable outlook on the long-term IDRs. "The rating reflects the city's stable economic and political position, sound budgetary performance, and supportive regulatory framework. It takes into account its ambitious investment plans and the increasing amount of direct debt in the 2014-16 schedules," according to Fitch. The agency

expects that Oradea will comply with its statutory debt servicing limits and that prudent debt management will mean Oradea's debt metrics remain in line with our expectations.

The ratings agency also affirmed Brasov’s long-term foreign and local currency Issuer Default Ratings (IDRs) at 'BBB-', with stable outlook. The short-term currency IDR was affirmed at ‘F3’. According to Fitch, "the affirmation reflects the city's sound operating performance, which benefits from a supportive national policy framework for local governments, and supports strong self-funding capacity and healthy debt ratios.

The ratings factor in the city's ambitious investment plan which may require debt financing after 2015 and substantial indirect risk stemming from the high debt of the city-owned former heating service provider, which is currently being restructured".