Fitch Cuts Bucharest, Oradea Ratings, After Romania’s Sovereign Cut

Earlier Monday, Fitch announced it has cut Romania’s sovereign rating by two notches, to ‘BB+’ from ‘BBB’, citing vulnerabilities in the emerging markets, spurred by the global crisis and the countries’ high current account deficits.

Fitch also downgraded both cities’ Short-term foreign currency ratings to ‘B’ from ‘F3’.

On the other hand, Fitch has simultaneously affirmed the two cities’ Long-term local currency ratings at ‘BBB-‘ (BBB minus) and revised their outlooks to negative from stable.

“The rating actions on Bucharest and Oradea reflect the tight financial and governance relationships between the Romanian cities’ local governments and the sovereign, whose ratings act as a cap for the former,” Fitch stated.

On Thursday, Fitch affirmed Bucharest’s Long-term foreign and local currency ratings at ‘BBB-‘ and Short-term foreign currency rating at ‘F3’, with stable outlooks for both Long-term ratings.