OREANDA-NEWS. Fitch Ratings has affirmed San Marino's Short-Term Foreign Currency (STFC) IDR at 'F2'.

Under EU credit rating agency (CRA) regulation, the publication of sovereign reviews is subject to restrictions and must take place according to a published schedule, except where it is necessary for CRAs to deviate from this in order to comply with their legal obligations. Fitch interprets this provision as allowing us to publish a rating review in situations where there is a change in our criteria that we believe makes it inappropriate for us to wait until the next scheduled review date to update the rating or Outlook/Watch status. The next scheduled review date for Fitch's sovereign rating on San Marino is 2 December 2016, but Fitch believes that a portfolio review is now warranted based on recent changes to our criteria.

The rating committee that assigned the ratings included within this Rating Action Commentary was a portfolio review following recent changes to our criteria, and focused on three areas, namely the assignment of STLC IDRs, the review of existing STFC IDRs and the review of the notching relationship between existing LTLC IDRs and Long-Term Foreign Currency (LTFC) IDRs. The committee approved a variation from criteria on the basis that the review applied all relevant sections of our criteria related to the above rating types but did not apply the sections of the criteria related to LTFC IDRs, as the latter were not included in the scope of this review.

KEY RATING DRIVERS

The affirmation of San Marino's STFC IDR at 'F2' reflects the following key rating drivers:

-In line with the updated guidance contained in Fitch's revised Sovereign Rating Criteria dated 18 July 2016, San Marino's STFC IDR meets the criteria required to support a STFC rating at the higher of the two options on our Long-Term rating scale where such optionality exists (at 'A+', the options are 'F1' or 'F1+'; at 'A-', the options are 'F2' or 'F1'; at 'BBB', the options are 'F3' or 'F2').

-Specifically, San Marino has an International Liquidity Ratio (ILR) of greater than 100%; at June 2016, its ILR was 127.2%.

RATING SENSITIVITIES

The main factor that could lead to a change in the STFC IDR is:

- A change in the LTFC IDR

The rating sensitivities outlined in the previous Rating Action Commentary dated 3 June 2016 are unchanged in respect of the LTFC IDR. Consistent with the criteria variation referred to above, a review of the LTFC IDR and associated rating sensitivities was not included as part of this review.

ASSUMPTIONS

The assumptions outlined in the previous Rating Action Commentary dated 3 June 2016 are unchanged in respect of the LTFC IDR. Consistent with the criteria variation referred to above, a review of the LTFC IDR and associated assumptions was not included as part of this review.