S&P downgrades Bucharest on EUR 500 mln eurobonds, then withdraws rating

Ratings agency Standard & Poor's downgraded the Bucharest City Hall from BB+ to BB on uncertainties over debt management and the refinancing strategy for the EUR 500 million eurobonds due to mature in 2015, after which it withdrew the rating all together, citing a lack of information for proper evaluation. “At the time the rating was withdrawn, the outlook was negative,” S&P wrote.

The ratings agency gripes over Bucharest's "developing and unbalanced" institutional framework, as well as its weak liquidity situation, which it gives as additional reasons for downgrade. “Nevertheless, the ratings were underpinned by Bucharest's position as Romania's administrative, financial, and economic center, and the city's very high operating budget surplus,” S&P went on. The agency withdrew the ratings for “contractual reasons”, which in turn led to an insufficient flow of information for rating surveillance. editor@romania-insider.com