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Fitch Ratings affirms Autonomous Community of Canary Island's IDRs at 'BBB'.

Barcelona: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, affirmed the Autonomous Community of the Canary Island's (or Canaries) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BBB' with Positive Outlooks.

It affirmed the region's Short-Term Foreign-Currency IDR at 'F2'. The 'BBB' ratings on the Canary Islands' outstanding senior unsecured bonds have also been affirmed. The affirmation reflects Canary's improving fiscal performance in recent years, a moderate direct debt burden and financial support from the central government. The Positive Outlook incorporates Fitch's expectations that the region will achieve a structural positive current balance, with direct debt declining and stabilising towards 100% of current revenue in 2018.

Its base case scenario forecasts the region's operating margin will continue to improve to between 9% and 11% in 2018 and 2019, with a current balance of 8%-10%. This is based on expected average operating revenue growth of 5%, on the back of economic growth. We expect operating expenditure to continue rising in 2018 by 2.5%-3.5%, compared with 1.5% in 2016.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Geographic Code:4EUSP
Date:Jul 18, 2018
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