Rating of Flanders

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Fitch Ratings has revised on 9 April 2020 the Outlook on the Flemish Community's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to Negative from Stable and affirmed the IDRs at 'AA'. Fitch has also affirmed the Short-Term Foreign-Currency IDR at 'F1+'.

The revision of the Flemish Community's Outlook follows the revision of Belgium's Outlook to Negative from Stable on 3 April 2020.

The 'AA' rating is one notch above the rating of Belgium. This is quite a unique situation: the Flemish Community is 1 of the 6 regions in Europe with a rating above the sovereign. The other regions are Friuli-Venezia Giulia, Sardinia, Valle d’Aosta and Veneto from Italy and the Autonomous Community of the Basque Country from Spain.

The Fitch reports show that Flanders, apart from a solid economy with indicators above the Belgian and European average, scores as “strong” on 5 of 6 fundamental risk factors (KRF – key risk factors):

  • Revenue robustness
  • Revenue adjustability
  • Expenditure sustainability
  • Liabilities and liquidity robustness
  • Liabilities and liquidity flexibility

 Fitch considers that the Flemish Community may not be rated more than one notch above the Belgium state (AA-/Negative). As a result, a downgrade of the sovereign would be reflected in the ratings of the Flemish Community, hence the Negative Outlook.

You can find the rating reports from Fitch of 9 April 2020 and 6 March 2020 below.