Fitch: City of Barcelona's IDRs not affected by Catalonia's RWN

"The City of Barcelona's (Barcelona) Issuer Default Ratings (IDRs; BBB+/Positive/F2) are not affected in the short-term by the Rating Watch Negative (RWN) placed on 5 October on the Autonomous Community of Catalonia," Fitch Ratings said in a recent report.

Key highlights:

• The president of Catalonia on 10 October called Catalonia's unilateral declaration of independence, but has suspended it in search of dialogue.
• The central government has required the president to confirm whether it has formally declared independence.
• This is in line with our rating case scenario, which incorporates an escalation of the existing tensions between the central and regional governments. 
• Our negative rating action on Catalonia will have no immediate rating impact on Barcelona given that the regional government has negligible influence on the city's revenue and expenditure.
• We currently do not expect the political developments to challenge Barcelona's strong revenue.
• We expect that the recently announced changes of legal headquarters of many large companies to outside of Catalonia and growing tensions will result in negative effects -albeit limited- on the local economy.