UniCredit Bulbank AD
Summary:
On 19 December 2014 Fitch affirmed Bulgaria’s rating at BBB-/BBB with Stable Outlook.
Tue, 23/12/2014
Fitch Ratings has affirmed Bulgaria's long-term foreign and local currency Issuer Default Ratings (IDR) at 'BBB-'and 'BBB', respectively. The Outlooks are Stable. The issue ratings on Bulgaria's senior unsecured foreign and local currency bonds have also been affirmed at 'BBB-'and 'BBB', respectively. The Country Ceiling has been affirmed at 'BBB+' and the Short-term foreign currency IDR at 'F3'.
The affirmation and Stable Outlook reflect the following key factors:
| • | public finances have taken a negative hit in 2H14, but on aggregate compare favorably with rating peers, | |
| • | the impact of 2014's wider-than-expected fiscal deficit, on top of additional borrowing to provide liquidity support to Bulgaria's banking sector and replenish the Deposit Guarantee Fund, is projected to increase gross general government debt in 2014 to 28% of GDP from 18.3% of GDP in 2013, | |
| • | Bulgaria's banking sector has stabilised since being targeted by substantial bank runs in June 2014, | |
| • | Bulgaria's economic growth remains subdued compared with 'BBB' peers. Geopolitical risks from Russia and Ukraine and a still fragile Eurozone recovery, have led Fitch to significantly revise down Bulgaria's 2015 real GDP growth forecast to 0.7% from July's 2.5%, after growth of 1.5% in 2014, | |
| • | political uncertainty has abated somewhat with the formation of a new government in November 2014 following early elections in October. | |
The Stable Outlook reflects Fitch's assessment that upside and downside risks to the rating are currently balanced.
Impact on investors: Fitch has affirmed Bulgaria’s sovereign rating at BBB-/BBB with Stable Outlook.