Fitch Ratings has given Warsaw an international long-term rating (IDR) for foreign currency debt at A-, the agency said. Fitch has also given A- long-term ratings for the bond issue program up to PLN 3bn and all issues made by the city under this program and confirmed the city’s international long-term rating for domestic currency debt at A-. The ratings outlook is stable.
The affirmation of the ratings reflects Fitch’s unchanged view that Warsaw’s mid-term operating performance and debt ratios will be comparable to that of other A- rated cities, despite the economic slowdown caused by the coronavirus pandemic and earlier decisions by central authorities to lower the first PIT threshold and raise teachers’ salaries.
Due to the continued spending pressure resulting from an imbalance in the municipal waste management system, Fitch lowered the standalone credit profile (SCP) of Warsaw from aa to aa- to reflect the deterioration of debt ratios towards the lower end of the debt sustainability rating for aa category.
According to our updated rating scenario, the city’s debt repayment ratio will average above 8x compared to 6.5x in the previous year’s forecast. The city’s ratings remain limited by Poland’s rating (A- / stable outlook).
Source: Fitch and ISBnews
