International credit rating agency Standard & Poor’s upgraded the credit rating of the Bulgarian capital Sofia, the city’s mayor Yordanka Fandukova said on November 11 2012.
Standard & Poor’s raised the rating to BBB from BBB- with a stable outlook.
Fandukova said that the rating was the same as that of Bulgaria, noting that the rules did not allow a city to have a higher rating than a country. “We have reached the maximum,” Fandukova said.
In its notice, issued on November 5, Standard & Poor’s said that the rating on Sofia reflected the credit rating agency’s view of the city’s “very positive liquidity position, consistently high operating budgetary performance, and relatively good budgetary flexibility”.
Sofia’s strategic position as the administrative, financial, and economic centre of Bulgaria (BBB/Stable/A-2) also supported the rating, Standard & Poor’s said.
The agency added, “the rating is constrained by our ‘consolidating but uneven’ assessment of the institutional framework for Bulgarian municipalities, which, combined with emerging strategic and financial planning in the city, limits the predictability of the city’s financial performance. Relatively high exposure of the city’s debt to market risks and large contingent liabilities related to its municipal companies also constrain the rating”.
(Photo, of statue of St Sofia: Clive Leviev-Sawyer)