Moody's lifts Istanbul, TOKI outlook to positive

Moody's Investors Service said it changed the outlook on the Ba3 issuer rating of Istanbul Metropolitan Municipality and the Ba3/Baa1.tr issuer ratings of Toplu Konut Idaresi Baskanligi (TOKI), Turkey's housing development administration, to positive from stable.

The outlook change follows Moody's decision to change the outlook of the Turkish Republic to positive from stable. The agency said Istanbul retains a strategic role in the national economy, and TOKI features close operating and financial links with the Turkish government due to the nature of its functions.

Istanbul's rating continues to reflect its active fiscal management and some fiscal flexibility, Moody's said, although the city's implementation of large infrastructure investments has led to a fast-growing debt burden.

Moody's said TOKI's ratings also reflect positive financial results, supported by the substantial expansion of the company's assets. The agency added that notwithstanding TOKI's positive financial position, the implementation of its large capital program has led to rapidly narrowing liquidity position and higher-than-expected recourse to domestic borrowing.

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