Moody’s upgrades two big local municipalities’ ratings

MILAN

‘We hope that such positive developments would speed up the approval of our big infrastructure projects, like our Tramcar Project,’ says Kocaoğlu. Company photo

Moody’s Investors Service has upgraded the issuer ratings of the metropolitan municipalities of both Istanbul and İzmir to Baa3 from Ba1. İzmir’s national scale issuer rating was also upgraded to Aa3.tr from A1.tr, according to a press release by the credit rating agency.

Istanbul and İzmir receive the bulk of their operating revenue from the central government in the form of national taxes collected and redistributed to metropolitan municipalities on a monthly basis. “An increase in these allocations alongside Turkey’s robust economic growth, and tight expenditure controls have supported an improvement in their budgetary results. These rising surpluses, coupled with the cities’ disciplined financial management and close oversight of municipal-related service companies have enabled both Istanbul and İzmir to reduce their debt levels to 88 percent and 67 percent of operating revenue at fiscal year-end 2012, respectively 2010: 128 percent and 97 percent,” the statement said.

“This is very good news. We hope that such positive developments would speed up the approval of our big infrastructure projects, like our Tramcar Project,” said Aziz Kocaoğlu, Mayor of the İzmir Metropolitan Municipality. He added that with the latest upgrade by Moody’s, foreign investors would become more willing to invest in İzmir. “Our municipality has already secured over 183.8 million euros in funds from various respectable finance institutions without needing any state guarantee for the last five months thanks to the continual raises in our credit rating,” he added.