Fitch ups Brasov, Oradea; positive watch on Bucharest

Fitch Ratings said it upgraded the Romanian cities of Brasov and Oradea's long-term foreign-currency ratings to BBB- from BB+.

The agency also said it upgraded its short-term foreign-currency ratings to F3 from B and affirmed the long-term local-currency ratings at BBB-.

The outlook is stable.

The agency also said it placed the City of Bucharest's long-term foreign-currency rating of BB+, long-term local-currency rating of BBB- and short-term foreign-currency rating of B on Rating Watch positive.

The outlook is stable.

The actions follow the upgrade of Romania's long-term foreign-currency issuer default rating to BBB-, long-term local-currency issuer default rating to BBB from BBB- and short-term foreign-currency issuer default rating to F3 from B.

The ratings on Bucharest, Brasov and Oradea reflect the tight financial and governance relationships between the Romanian cities' local governments and the sovereign, ensuring a strong credit linkage, Fitch said.

The highly-centralized budgetary system for Romanian local governments ensures state support and control of the cities' financial position, including debt approval, but it also acts as a constraint on the cities' budgetary flexibility, the agency said.

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