Despite the negative economic developments in Turkey, the International Credit Rating Agency Fitch Ratings once again approved the "highest national credit rating", which has been at the "AAA" level for a long time, thanks to the dynamic economy, sound budget performance and prudent financial management of the Izmir Metropolitan Municipality.
Fitch Ratings, which published a report on İzmir last January, updated its rating with the finalized financial data of İzmir Metropolitan Municipality. Despite the additional costs incurred by the exchange rate increase in investments and borrowings, İzmir Metropolitan Municipality managed to maintain its credit rating at the highest level thanks to its sound financial management, strong repayment and debt service capacity resulting from strong operating balances.
With the "AAA" credit rating, which is the National Long-Term Credit Rating, Izmir Metropolitan Municipality has reaffirmed the fact that it is a center of attraction for foreign investors in terms of investment feasibility for foreign financing to be obtained from international financing institutions. With its “AAA” credit rating, it once again revealed that the door to financing the infrastructure investments planned to be made despite the difficult economic conditions, unstoppable exchange rate increase and high inflation process is open.
President Soyer: It is important to confirm our success
Evaluating the rating confirmation by Fitch Ratings, Izmir Metropolitan Municipality Mayor Soyer said, “Being among the institutions with the highest credibility enables foreign investors to invest in Izmir with confidence. Maintaining and even strengthening the environment of trust and stability will ensure the progress of our economy and increase in our welfare. President Soyer stated that it is very important to be confirmed by rating agencies to achieve a 97 percent realization rate in budget expenditures and to reduce the budget deficit by half in this difficult period when the budget deficit is normalized, such as the pandemic.
Stating that they were able to prevent deterioration in expense items thanks to long-term project-based borrowings without Treasury guarantee from international markets, Soyer continued his words as follows: Knowing how to take the necessary steps, our strong position among municipalities, diversified financing resources from international markets to increase its competitiveness, sustainable, green and environmentalist investment works, which are extremely important for the development and future of the city, ensured that our İzmir remains at the top of the rating league.”
Soyer said, “I have full confidence that we will maintain our strong position in the coming years if a rebalancing can be achieved in risk premiums and exchange rates.”
What's in the Fitch Ratings report?
The most important criterion for evaluating the debt sustainability of municipalities is the repayment rate, İzmir Metropolitan Municipality has a debt sustainability in the AAA category thanks to its stronger repayment capacity well below 5 times and a solid current debt service capacity resulting from stronger operating balances. 82,1 percent of the total debt of the company is in euro; long debt maturity, 7.2-year weighted average maturity and full depreciation profile, the foreign currency risk is alleviated, 87,9 percent of the debts of the Izmir Metropolitan Municipality are fixed-rate and this situation reduces the interest rate risk of Izmir, the capital expenditures of Izmir statements that constitute 54 percent of its total expenditures and that the majority of these capital expenditures include the construction of metro lines came to the fore.
What does AAA credit rating mean?
The “AAA” category means that it is investment grade and has an extremely high ability to meet its financial obligations.
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