S&P lifts Romania up

Standard&Poor’s Ratings Services has upgraded Romania’s long-term local currency sovereign credit and senior unsecured debt ratings to ‘BB’ from ‘BB-‘, and its long-term foreign currency sovereign credit and senior unsecured debt ratings to ‘BB-‘ from ‘B plus’. Romania’s bonds on the international market are now considered as “speculative” instead of the previous “highly speculative.” Romania still remains one step behind Bulgaria, the country rating of which is BB. The gap might become as wide as two steps again, because Bulgaria’s rating outlook is positive. S&P says the long-term ratings on Romania could be raised in the next year or so, if financial discipline and structural reforms continue. In particular, S&P feels, prudent income policies in the budgetary sector and at the loss-making government-owned companies are crucial. “An acceleration in the restructuring of a large and inefficient energy sector could help further reduce inflation, improve Romania’s resource allocation, and accelerate an effective transition to a market-based economic structure,” Helena Hessel, S&P’s credit analyst for Romania says. ZF