Fitch affirms Istanbul

Fitch Ratings said it affirmed Istanbul Metropolitan Municipality's (IMM) long-term foreign and local currency ratings at BB- with a stable outlook.

The ratings reflect Istanbul's ongoing sound budgetary performance, wide expenditure flexibility and stronger-than-national average socio-economic profile, Fitch said, adding that the ratings also take into account the municipality's limited revenue flexibility, the uncertain budgetary impact of the enlargement of the boundary and the considerable indirect risk stemming from municipal companies and entities.

The stable outlook reflects Fitch's expectations that, in spite of a substantial forecast increase in direct and indirect debt, the strong operating balances of the municipality and expected growth in revenues should allow for the comfortable debt coverage ratios to be maintained.

The municipality benefits from wide expenditure flexibility, reflecting its significant capital expenditure component in the budget, the agency said.

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