Fitch affirms rating for Bucharest municipality

Fitch rating agency has affirmed the ratings of Romania’s capital city Bucharest: BBB-/stable for long term local and foreign currency and F3 short term foreign currency. In its latest financing action, Bucharest last summer issued RON 555 million (EUR 120 million) of local currency bonds with a maturity of 10 years and a coupon of 5.6% attached. On January 2, the bonds were traded at 2% over face value. Fitch says that affirming municipality’s ratings reflects Bucharest's continued sound operating performance, moderate debt levels relative to the city's operating balance and current revenue and sound debt ratios. The ratings also factor in a strong tax base, due to Bucharest's wealth being substantially greater than the national average. Negatively, the ratings reflect uncertainty over contingent liabilities. The ratings of Bucharest are constrained by the ratings of Romania (BBB-/Stable/F3). The city faces high investment needs to cope with a growing population and the local authorities' plan to further develop the city's infrastructure and, in particular, general road infrastructure. Fitch maintains Romania’s investment-grade rating editor@romania-insider.com (photo source: Pixabay.com)