Poznań with high international agencies ratings
On February 26, 2021, the Moody's Investors Service agency once again confirmed Poznań's international ratings for foreign currency debt at the level of A3 with a stable forecast. A day later, the Fitch Ratings agency also confirmed the international long-term ratings for the City of Poznań for debt in foreign and domestic currency at the "A-" level. The ratings outlook is stable.
High ratings mean that the city has a very high ability to meet its financial obligations. The stable forecast informs that the financial credibility of Poznań should not change in the near future.
Moody's emphasizes the prudent fiscal policy of the City, which results in steady good financial results and moderate debt levels as well as a rich and diverse local economy with the second highest GDP per capita in Poland, after Warsaw. The rating also takes into account the large investment needs of Poznań with the active role of municipal companies in the implementation of the city's capital expenditure.
In the case of the Fitch agency, the rating of Poznań is the highest that a Polish local government can obtain from this agency, equal to the country's creditworthiness. Fitch also maintained its previous opinion - the city's rating is currently limited by Poland's rating. Therefore, any change in a country's rating will be automatically reflected in the rating of Poznań.
The rating affirmation reflects Fitch's unchanged opinion that Poznan's operating results and debt repayment ratios will remain strong in the medium term, despite the economic slowdown caused by the coronavirus pandemic.
In its assessment, Fitch takes into account the City's good financial management aimed at effectively limiting the growth of operating expenses, stable sources of income for the City and stable financial liquidity. The agency emphasizes that the city provides residents with high-quality communal and additional services beyond the obligatory tasks, and the fact that, unlike most Polish cities, Poznań has flexibility in increasing revenues from utility charges, rents and other charges.
Poznań is the most economically strong regional Polish city. This is evidenced by one of the highest levels of Gross Domestic Product per capita in the country (twice the national average) and one of the lowest unemployment rates among Polish cities.
Ratings are opinions of independent, specialized institutions that determine the creditworthiness of the rated entity. They express its overall ability to meet its financial obligations or relate to a specific issue of a liability or financial program. The main task of the city's rating is to inform current and future investors about its credibility and solvency. Having a creditworthiness assessment enables easier and wider access to financial markets and allows for obtaining external capital on more favorable terms.
Moody's Investors Service and Fitch Ratings are one of the most important rating agencies in the world, with high credibility and prestige on the international market of rating services.
Moody's agency assesses the creditworthiness of 30 thousand. issuers from 100 countries around the world. The city of Poznań has been taken into account by it since 2001, and the current rating has remained unchanged since 2006. Fitch Ratings evaluates the creditworthiness of 6,000. issuers from over 100 countries around the world, including most Polish cities and provinces. The creditworthiness of Poznań has been assessed since 2013.
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