OREANDA-NEWS. Fitch Ratings has downgraded the Romanian City of Bucharest's Long-Term Local Currency (LTLC) Issuer Default Rating (IDR) to 'BBB-' from 'BBB'. The Outlook is Stable. A full list of ratings is at the end of this commentary.

Under EU credit rating agency (CRA) regulation, the publication of International Public Finance 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 we believe makes it inappropriate for us to wait until the next scheduled review date to update the rating or Outlook/Watch status. In this case the deviation was caused by the downgrade of the Sovereign's Long-Term Local Currency IDR on 22 July 2016.

The next scheduled review date for the City of Bucharest will be determined in December 2016 when Fitch will publish its sovereign and local and regional governments rating review calendars for 2017.

KEY RATING DRIVER

The rating action reflects the following rating drivers and their relative weights:

HIGH

Following the downgrade of Romania's LTLC IDR on 22 July 2016 (See 'Fitch Applies Criteria Changes to Romania's Ratings' at www. fitchratings. com) due to our sovereign criteria change, we have taken a similar rating action on the city as local and regional governments usually cannot be rated higher than their sovereign.

The City of Bucharest's other ratings were last affirmed on 22 July 2016. The city's Long - and Short-Term Foreign Currency IDRs were unaffected by the sovereign criteria change.

RATING SENSITIVITIES

Bucharest's ratings are constrained by the sovereign's ratings. In case of a sovereign upgrade the city could be upgraded if it maintains a strong operating performance and sound debt metrics that ensure investments are largely funded by internal resources.

A significant increase in debt pressure due to deteriorating operating performance or recognition of contingent liabilities linked to the city's public-sector entities as direct debt would trigger a downgrade.

The current ratings are as follows:

- Long-Term Local Currency IDR: downgraded to 'BBB-' from 'BBB'; Outlook Stable

-Long-Term Foreign Currency IDR: 'BBB-'; Outlook Stable

-Short-Term Foreign Currency IDR: 'F3'