OREANDA-NEWS. Fitch Ratings analyses in a new report the different events that have occurred since 2013 in relation with the 'BBB-' rating floor in place for the autonomous communities in Spain (BBB+/Stable/F2).

The rating floor is in line with Fitch's International Local and Regional Governments Rating Criteria, released in May 2015. Under a rating floor, the published Issuer Default Rating (IDR) of a local and regional government (LRG) may be higher than its intrinsic credit profile (ICP). Each rating floor is constantly reviewed, and Fitch may remove it if the factors that led to its introduction diminish.

The floor is grounded in extraordinary state support, including the necessary liquidity to cover debt maturities to prevent a default of the autonomous communities. This support increased between 2012 and 2015, by way of further oversight and new state financing instruments.

Fitch says it expects the mechanism of liquidity support to the autonomous communities to continue over the medium term despite the fragmented parliament resulting from the recent general elections, as none of the major parties has indicated plans to remove it.

Catalonia's (BB/Negative/B) relationship with the central government has suffered since 2012 after it pushed for independence. Fitch has temporarily suspended the rating floor for Catalonia, after the central government warned that it might withdraw the liquidity support on which the region depends on to meet its debt obligations. Catalonia is now rated at its ICP.