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Fitch says Porto's credit profile is well above the national’s and highlights the lowest debt ever
10 March 2017
Fitch says Porto's credit profile is well above the national’s and highlights the lowest debt ever
The rating agency Fitch praised the "stable budgetary performance" and prudent management of the City Council that result in "low debt levels ", which they say have fallen to record levels. The agency maintains the BB+ rating for the city, but warns that this only happens because it obeys the criterion of the agency, which is guided by the sovereign rating, since Porto is worth a lot more than the indicator points out.

Fitch praises the management of Rui Moreira, Mayor of Porto, adding that "Porto's intrinsic credit profile is stronger than its ratings indicate, due to the city's good budgetary performance, low debt and good liquidity." The agency also maintains its position in "prudent management" and "Porto's role as a service center in the North of Portugal", which is classified as "credit positive".

According to Fitch, Porto reduced its debt in 2016 to 33.3 million euros, while in 2015 it was 80.1 million euros. In this regard, the contribution of the agreement Acordo do Porto was relevant because it compensated the Municipality for the airport plot, a value that was being claimed for decades.

To conclude, the US rating agency sums up: "Porto's intrinsic credit profile is well above the sovereign and will continue to be strong in our base scenario."
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