BUCHAREST (Romania), May 18 (SeeNews) - Fitch Ratings said it has affirmed the long-term foreign- and local currency issuer default ratings (IDRs) of Romanian cities Bucharest, Oradea, Brasov and Buzau at 'BBB-' with negative outlook.
The four cities' operating performance and debt ratios will remain in line with 'BBB-' rated peers' over the medium term, despite an expected economic downturn triggered by the coronavirus pandemic, Fitch said in separate statements published on Friday evening.
While the cities' most recently available data may not have indicated performance impairment, material changes in revenue and cost profiles are occurring across the sector and likely to worsen in the coming weeks and months as economic activity suffers and some form of government restrictions are maintained or broadened, the rating agency said.
The rating of the four cities might deteriorate even further if Fitch decided on a downgrade of Romania's IDRs or on a downward revision of their Standalone Credit Profile (SCP) by three notches, which could occur if the cities' debt metrics sustainably weaken, widening their debt payback ratio.
Fitch said that also affirmed the Romanian 5th District of Bucharest's IDRs at 'BBB-' with negative outlook.
On April 17, Fitch Ratings revised Romania's outlook to negative from stable, while affirming the country's IDR at 'BBB-'. The revision of the outlook reflects the substantial worsening in Romania´s public finances expected in the short-term as the outbreak and spread of the COVID-19 pandemic aggravates an already weak fiscal position, the rating agency said in its statement at the time.
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