Revised Fitch Methodology Sends Sovereigns Down

Fitch Ratings says it has introduced new criteria to assign credit notes, leading to lower ratings for some countries.



In a statement on Saturday, the ratings agency said: "Fitch Ratings has applied its revised Sovereign Criteria dated 18 July 2016 to conduct a global review of the notching relationship between sovereign Long-Term Local Currency (LTLC) and Long-Term Foreign Currency (LTFC) Issuer Default Ratings (IDRs), review existing Short-Term Foreign Currency (STFC) IDRs and assign new Short-Term Local Currency (STLC) IDRs".



Upon application of new criteria, the Long-Term Local Currency (LTLC) ratings of 23 countries – including Thailand, Colombia and Bulgaria – were set lower than their previous notes.



"Fitch Ratings has downgraded Turkey's Long-Term Local Currency IDR to 'BBB-' from 'BBB'. The Outlook is Stable.



"The issue ratings on Turkey's long-term senior unsecured local currency bonds have also been downgraded to 'BBB-' from 'BBB'. The Short-Term Foreign Currency IDR has been affirmed at 'F3'," a separate release from Fitch said.



Turkey's Long-Term Local Currency note – at "BBB-" with a "stable outlook" – is within the range of investment grade. The Long-Term Foreign Currency rate, which stood at "BBB-", is also an investment-grade note.



A new assessment of Turkey's Long-Term Foreign Currency rate from Fitch is expected on Aug. 19. -