The short-term ratings on both cities were affirmed at F3, the agency said.
Brasov’s ratings reflect the city’s “sound operating performance, which benefits from a supportive national policy framework for local governments, and supports strong self-funding capacity and healthy debt ratios,” Fitch said in a statement.
The ratings factor in the city’s ambitious investment plan which may require debt financing after 2015 and substantial indirect risk stemming from the high debt of the city-owned former heating service provider, which is currently being restructured, the statement noted.
Fitch expects Brasov’s operating balance to remain sound in 2014-2016, averaging 20% of operating revenue (about 100 million lei, or EUR22.74 million, in nominal terms on average), securing healthy debt ratios.
Oradea’s ratings reflect the city’s stable economic and political position, sound budgetary performance, and supportive regulatory framework, the international agency said.
Fitch forecasts the city’s direct debt will continue to rise at a moderate pace until end-2016, with debt probably increasing above RON300 million. The agency notes Oradea’s “ambitious investment plans”, which could lead to a debt increase by some RON45 million in 2014.
However, “debt is prudently managed by having an even, amortizing structure,” Fitch said.