Rating of Flanders

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Fitch Ratings has affirmed on 30 April 2021 the Flemish Community's Long-Term Foreign-and-Local Currency Issuer Default Ratings (IDRs) at 'AA' with Negative Outlook. The Negative Outlook follows the outlook of Belgium. Fitch has also affirmed the Short-Term Foreign-Currency IDR at 'F1+'.

The 'AA' rating is one notch above the rating of Belgium and is the highest rating of all Belgian regions and communities. This is quite a unique situation: the Flemish Community is 1 of the 10 regions in Europe with a rating above the sovereign according to Fitch. The other regions are the autonomous Province of Bolzano, autonomous Province of Trento, Autonomous Region of Friuli-Venezia Giulia, Autonomous Region of Sardinia and the Autonomous Region of Valle d’Aosta from Italy and Historical Territories of Alava, Bizkaia and Gipuzkoa and the City of Pamplona from Spain.

The Fitch reports shows 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

The Flemish Community’s debt sustainability is assessed at the upper end of the ‘a’ category.

The rating could be downgraded if Belgium’s rating is downgraded or if the debt increased more than foreseen in the rating scenario. The Outlook would be revised to Stable if the Outlook on the sovereign was revised to Stable, all other factors being equal.

You can find the press release of 30 April 2021 and the full rating report of 6 May 2021 below.