Standard & Poor (S&P)'s Ratings Services has raised its long-term issuer credit ratings on the Turkish city of Istanbul to B from B- and has assessed the outlook as stable. The rating action follows S&P's upgrade of its ratings on the Republic of Turkey to B from B-, based on the progress made under the IMF-supported economic stabilization program.
Istanbul's position as Turkey's financial, economic, and cultural center closely links its development to that of the country as a whole. "Istanbul's rating continues to be constrained by the negative effects of changes to the equalization system, low revenue flexibility, and uncertainties related to potential new responsibilities," said S&P's credit analyst Elena Okorotchenko. "Above-national-average wealth indicators and expected economic recovery support the rating. The city's favorable debt maturity profile somewhat mitigates the risks associated with its growing debt burden."
The stable outlook on the city's rating reflects S&P's expectation that Istanbul will manage its debt and finances prudently despite the expected increase in financial pressure resulting from the changing equalization mechanisms and potential new expenditure responsibilities. The pressure may ease slightly with the observed improvement at the national level. The city's growing debt burden is expected to stay manageable owing to long maturities. — (menareport.com)
© 2003 Mena Report (www.menareport.com )