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Overview Of International Public Finance Rating Actions Since March 10, 2020

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Instant Insights: Key Takeaways From Our Research

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The Autumn Budget Kicks Off A Funding Regime Revision For U.K. Public Sector Entities

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Institutional Framework Assessment: U.K. Local Authorities


Overview Of International Public Finance Rating Actions Since March 10, 2020

World economies have gone into lockdown because of the coronavirus pandemic, and S&P Global Ratings has been monitoring the effect on its international public finance (IPF) ratings. Since March 10, we've reviewed almost one-third of the IPF issuers we rate (see chart 1). The majority of the 104 entities reviewed by May 21, 2020, were local and regional governments (LRGs; 80%), followed by infrastructure entities (10%), and housing (8%). The 83 LRGs reviewed globally represent around 42% of the entire portfolio.

Of the IPF issuers we've reviewed, we affirmed the ratings on 60%, revised the outlook to negative on a quarter, and downgraded 8%. Although we forecast that the majority of sovereigns we rate will face economic contractions, widening fiscal deficits, and rising government debt stocks, which in turn will affect credit conditions at other government levels, we have stable outlooks on 77% of our IPF ratings.

Chart 1

image

We continue to monitor the economic and financial fallout from COVID-19 and will review our IPF ratings when necessary, including through potential deviations from our EMEA publication calendar (see Calendar Of 2020 EMEA Sovereign, Regional, And Local Government Rating Publication Dates).

Our Global Macroeconomic Baseline Scenario Informs Our Rating Actions

We forecast a significant contraction of economic activity around the world (see "COVID-19 Deals A Larger, Longer Hit To Global GDP"), with real GDP globally declining by 2.4% in 2020. We then expect global growth to rebound to 5.9% in 2021.

S&P Global Ratings acknowledges a high degree of uncertainty about the rate of spread and peak of the coronavirus outbreak. Some government authorities estimate the pandemic will peak about midyear, and we are using this assumption in assessing the economic and credit implications.

Chart 2

image

COVID-19 Will Affect Different Asset Classes And Regions With Varying Severity

We believe the impact of COVID-19 will be felt differently across asset classes and regions. For instance, non-U.S. public universities will be affected more heavily than other IPF sectors. We forecast that COVID-19 measures and the global recession will put increasing pressure on operating margins for rated non-U.S. public universities in 2020 and probably 2021. As a result, we have revised the higher education sector outlook to negative from stable (for more, see "The Higher Education Sector Outlook Is Now Negative For Australia, Canada, Mexico, And The U.K.," published May 14, 2020).

We also expect emerging market local government and nonprofit public-sector entities to be impacted more severely. Notwithstanding some support these entities receive from their respective central governments, we view LRGs in emerging markets, public universities, and transport infrastructure operators and providers as the most vulnerable to current economic disruptions (for more, see "COVID-19: Emerging Market Local Governments And Non-Profit Public-Sector Entities Face Rising Financial Strains," published April 6, 2020).

At the same time, we believe certain sectors will be somewhat shielded from the effects of the pandemic in the near term. U.K. social housing providers, for instance, are largely countercyclical and currently generally benefit from robust liquidity positions, including cash and revolving credit facilities, and good market access (for more, see "U.K. Social Housing Providers Should Remain Largely Resilient To Short-Term Economic Difficulties From COVID-19," published April 23, 2020).

LRG ratings account for the bulk (81%) of reviewed ratings so far (see chart 3). That said, they also account for more than half of the rated IPF universe. While we have affirmed almost two-thirds of our reviewed LRG issuers, negative rating actions have been more pronounced for other asset classes. We have changed the outlooks on 10 out of the 15 infrastructure entities we rate in the IPF universe. In particular, Canadian airport providers have seen their outlooks change to negative from stable in light of the COVID-19-related decline in air travel.

Chart 3

image

A Negative Outlook Balance Means More Downgrades Might Be Coming

The outlook balance--the difference between positive and negative outlooks--is firmly negative (see chart 4). With 16% of IPF ratings carrying a negative outlook, versus 7% of IPF ratings with positive outlooks, we think more negative rating actions are likely. That said, the majority of IPF ratings, 77% at the moment, carry stable outlooks, indicating that currently we do not expect those ratings will change over the next one to two years.

Table 1

Downgrades
From To

Province of Mendoza

B- CCC-

Province of Entre Rios

B- CCC

City of Buenos Aires

B- CCC+

Province of Cordoba

B- CCC

Province of Neuquen

B- CCC-

Province of Rio Negro

B- CCC

Province of Salta

B- CCC

Province of Buenos Aires

CC SD
Source: S&P Global Ratings.

Chart 4

image

Table 2

Ratings List
Entity Region Asset class Date of publication Affirmed/rating change/outlook change Old rating Old outlook New rating New outlook Rating action

Ottawa Macdonald-Cartier International Airport Authority

Americas Transport Infrastructure 3/11/2020 Ratings Affirmed At 'A+'; Outlook Stable A+ Stable A+ Stable Affirmation

Goteborg (City of)

EMEA LRG 3/13/2020 'AA+/A-1+' Ratings Affirmed; Outlook Stable AA+ Stable AA+ Stable Affirmation

Lund (Municipality of)

EMEA LRG 3/13/2020 'AAA/A-1+' Ratings And 'K-1' Ratings Affirmed; Outlook Stable AAA Stable AAA Stable Affirmation

Stara Zagora (City of)

EMEA LRG 3/13/2020 Affirmation, Full Analysis BBB- Stable BBB- Stable Affirmation

Barcelona (City of)

EMEA LRG 3/13/2020 Affirmation A Stable A Stable Affirmation

Thrive Homes Ltd.

EMEA Social Housing 3/18/2020 Outlook On U.K.–Based Thrive Homes Revised To Stable From Negative On Improving Profitability; 'A' Rating Affirmed A Negative A Stable Outlook revision to stable from negative

Greater London Authority

EMEA LRG 3/20/2020 Ratings Affirmed At 'AA/A-1+'; Outlook Negative AA Negative AA Negative Affirmation

Sundsvall (Municipality of)

EMEA LRG 3/20/2020 'AA+/A-1+' And 'K-1' Ratings Affirmed; Outlook Stable AA+ Stable AA+ Stable Affirmation

Uppsala (City of)

EMEA LRG 3/20/2020 'AA+/A-1+' And 'K-1' Ratings Affirmed; Outlook Stable AA+ Stable AA+ Stable Affirmation

Tomsk Oblast

EMEA LRG 3/20/2020 Affirmation, Full Analysis BB- Stable BB- Stable Affirmation

Krakow (City of)

EMEA LRG 3/20/2020 Affirmation A- Stable A- Stable Affirmation

Lodz (City of)

EMEA LRG 3/20/2020 Affirmation BBB+ Stable BBB+ Stable Affirmation

Saxony-Anhalt (State of)

EMEA LRG 3/20/2020 Affirmation AA+ Negative AA+ Negative Affirmation

Vorarlberg (State of)

EMEA LRG 3/20/2020 Affirmation AA+ Stable AA+ Stable Affirmation

Hemso Fastighets AB

EMEA Social Housing 3/25/2020 'A-/A-2' And 'K-1' Ratings Affirmed; Outlook Stable A- Stable A- Stable Affirmation

La Rioja (Province of)

Americas LRG 3/26/2020 'CCC-' Ratings Affirmed And Off CreditWatch Negative After Payment Of Interest Within Grace Period CCC- CWN CCC- Negative Affirmation

Platform Housing Group

EMEA Social Housing 3/26/2020 Assigned 'A+' Rating; Outlook Stable A+ Stable New Rating

Zagreb (City of)

EMEA LRG 3/27/2020 Outlook Revised To Negative From Stable On Deteriorating Financial Situation; 'BB' Ratings Affirmed BB Stable BB Negative Outlook revision to negative

The Basque Country (Autonomous Community of)

EMEA LRG 3/27/2020 Affirmation AA- Stable AA- Stable Affirmation

Bizkaia (Historical Territory of)

EMEA LRG 3/27/2020 Affirmation AA- Stable AA- Stable Affirmation

Navarre (Autonomous Community of)

EMEA LRG 3/27/2020 Affirmation AA- Stable AA- Stable Affirmation

Bogota Distrito Capital

Americas LRG 3/27/2020 Outlook Revised To Negative Following Same Action On Colombia; 'BBB-' Ratings Affirmed BBB- Stable BBB- Negative Outlook revision to negative

Housing Solutions

EMEA Social Housing 3/27/2020 Ratings Affirmed At 'A+'; Outlook Stable A+ Stable A+ Stable Affirmation

Guanajuato (State of)

Americas LRG 3/28/2020 Outlooks On Four Mexican Local And Regional Governments Revised To Negative From Stable; Ratings Affirmed BBB Stable BBB Negative Outlook revision to negative

Queretaro Arteaga (State of)

Americas LRG 3/28/2020 Outlooks On Four Mexican Local And Regional Governments Revised To Negative From Stable; Ratings Affirmed BBB Stable BBB Negative Outlook revision to negative

Queretaro (City of)

Americas LRG 3/28/2020 Outlooks On Four Mexican Local And Regional Governments Revised To Negative From Stable; Ratings Affirmed BBB Stable BBB Negative Outlook revision to negative

Edmonton Regional Airports Authority

Americas Transport Infrastructure 4/1/2020 Ratings Affirmed; Outlook Revised To Negative Due To COVID-19 A+ Stable A+ Negative Outlook revision to negative

Vancouver Airport Authority

Americas Transport Infrastructure 4/1/2020 Ratings Affirmed; Outlook Revised To Negative Due To COVID-19 AA Stable AA Negative Outlook revision to negative

Greater Toronto Airports Authority

Americas Transport Infrastructure 4/1/2020 Ratings Affirmed; Outlook Revised To Negative Due To COVID-19 A+ Stable A+ Negative Outlook revision to negative

Winnipeg Airports Authority Inc.

Americas Transport Infrastructure 4/1/2020 Ratings Affirmed; Outlook Revised To Negative Due To COVID-19 A+ Stable A+ Negative Outlook revision to negative

Halifax International Airport Authority

Americas Transport Infrastructure 4/1/2020 Ratings Affirmed; Outlook Revised To Negative Due To COVID-19 AA- Stable AA- Negative Outlook revision to negative

NAV CANADA

Americas Transport Infrastructure 4/1/2020 Ratings Affirmed; Outlook Revised To Negative Due To COVID-19 AA Stable AA Negative Outlook revision to negative

Ottawa Macdonald-Cartier International Airport Authority

Americas Transport Infrastructure 4/1/2020 Ratings Affirmed; Outlook Revised To Negative Due To COVID-19 A+ Stable A+ Negative Outlook revision to negative

The Federal Bridge Corp. Ltd.

Americas Transport Infrastructure 4/1/2020 Ratings Affirmed; Outlook Revised To Negative Due To COVID-19 A+ Stable A+ Negative Outlook revision to negative

Olomouc (City of)

EMEA LRG 4/3/2020 Ratings Affirmed At 'A+'; Outlook Stable, Full Analysis A+ Stable A+ Stable Affirmation

Vastra Gotaland (Region of)

EMEA LRG 4/3/2020 'AAA/A-1+' And 'K-1' Ratings Affirmed; Outlook Stable AAA Stable AAA Stable Affirmation

Orebro (Municipality of)

EMEA LRG 4/3/2020 Outlook Revised To Negative; Ratings Affirmed At 'AA+/A-1+' And 'K-1' AA+ Stable AA+ Negative Outlook revision to negative

Stockholm (Region of)

EMEA LRG 4/3/2020 Ratings Affirmed At 'AA+/A-1+'; Outlook Stable AA+ Stable AA+ Stable Affirmation

Samara Oblast

EMEA LRG 4/3/2020 Ratings Affirmed At 'BB+'; Outlook Stable BB+ Stable BB+ Stable Affirmation

St. Gallen (Canton of)

EMEA LRG 4/3/2020 Affirmation AA+ Stable AA+ Stable Affirmation

New South Wales

APAC LRG 4/8/2020 Outlook Revised To Negative After Similar Action On The Sovereign; Ratings Affirmed AAA Stable AAA Negative Outlook revision to negative

Australian Capital Territory

APAC LRG 4/8/2020 Outlook Revised To Negative After Similar Action On The Sovereign; Ratings Affirmed AAA Stable AAA Negative Outlook revision to negative

State Of Victoria

APAC LRG 4/8/2020 Outlook Revised To Negative After Similar Action On The Sovereign; Ratings Affirmed AAA Stable AAA Negative Outlook revision to negative

Paris (City of)

EMEA LRG 4/10/2020 Outlook Revised To Negative On Operating Performance Pressure; 'AA/A-1+' Ratings Affirmed AA Stable AA Negative Outlook revision to negative

Lyon (City of)

EMEA LRG 4/10/2020 Affirmation AA Stable AA Stable Affirmation

Marseille (City of)

EMEA LRG 4/10/2020 Affirmation A+ Stable A+ Stable Affirmation

Tashkent Oblast

EMEA LRG 4/15/2020 Rating Suspended On Lack Of Sufficient Information To Maintain The Rating BB- Stable NR NR Rating suspension

Jonkoping (Municipality of)

EMEA LRG 4/17/2020 Outlook Revised To Negative On Risks Of Increased Budgetary Pressure; Ratings Affirmed AA+ Stable AA+ Negative Outlook revision to negative

Östersund (City of)

EMEA LRG 4/17/2020 'AA+/A-1+' And 'K-1' Ratings Affirmed; Outlook Stable AA+ Stable AA+ Stable Affirmation

Skopje (Municipality of)

EMEA LRG 4/17/2020 Affirmation BB- Stable BB- Stable Affirmation

Palmerston North City Council

APAC LRG 4/21/2020 Outlook Revised To Stable From Positive On Growing Deficits; 'AA/A-1+' Ratings Affirmed AA Stable AA Negative Outlook revision to negative

King's College London

EMEA Higher Education 4/23/2020 Outlook Revised To Negative As COVID-19 Could Disrupt Enrolment; 'AA-' Rating Affirmed AA- Stable AA- Negative Outlook revision to negative

Helsingborg (City of)

EMEA LRG 4/24/2020 Ratings Affirmed At 'AAA/A-1+'; Outlook Stable AAA Stable AAA Stable Affirmation

Riga (City of)

EMEA LRG 4/24/2020 'A-/A-2' Ratings Affirmed; Outlook Stable A- Stable A- Stable Affirmation

Skane (Region of)

EMEA LRG 4/24/2020 'AA+' Ratings Affirmed; Outlook Stable AA+ Stable AA+ Stable Affirmation

Hesse (State of)

EMEA LRG 4/24/2020 'AA+' Ratings Affirmed; Outlook Stable AA+ Stable AA+ Stable Affirmation

Zurich (City of)

EMEA LRG 4/24/2020 'AA+' Ratings Affirmed; Outlook Stable AA+ Stable AA+ Stable Affirmation

Autonomous Community of Andalusia

EMEA LRG 4/24/2020 'BBB+' Rating Affirmed; Outlook Stable BBB+ Stable BBB+ Stable Affirmation

Autonomous Community of Extremadura

EMEA LRG 4/24/2020 Outlook Revised To Stable On Expected Weaker Budgetary Performance; Affirmed At 'BBB/A-2' BBB Positive BBB Stable Outlook change to stable from positive

Burgenland (State of)

EMEA LRG 4/24/2020 'AA/A-1+' Ratings Affirmed; Outlook Stable AA Stable AA Stable Affirmation

Geneva (City of)

EMEA LRG 4/24/2020 Affirmation AA- Stable AA- Stable Affirmation

Mendoza (Province of)

Americas LRG 4/28/2020 Downgraded To 'CCC-' From 'B-' On Severe Liquidity Pressures, Outlook Remains Negative B- Negative CCC- Negative Downgrade

Lincolnshire Housing Partnership Ltd.

EMEA Social Housing 4/28/2020 'A+' Rating Affirmed; Outlook Stable A+ Stable A+ Stable Affirmation

MKB Fastighets AB

EMEA Social Housing 4/28/2020 'AA/A-1+'And 'K-1' Ratings Affirmed; Outlook Stable AA Stable AA Stable Affirmation

Metropolitano de Lisboa E.P.

EMEA Transport Infrastructure 4/29/2020 Outlook Revised To Stable After Similar Action On Portugal; 'BBB' Rating Affirmed BBB Positive BBB Stable Outlook change to stable from positive

Entre Rios (Province of)

Americas LRG 4/30/2020 Ratings Downgraded To 'CCC' From 'B-' On Rising Liquidity Pressures, Outlook Is Negative B- Negative CCC Negative Downgrade

Colne Housing Society Ltd.

EMEA Social Housing 4/30/2020 'A' Ratings Put On CreditWatch Positive On Planned Merger A Stable A CWP Creditwatch Positive

Liguria (Region of)

EMEA LRG 5/1/2020 Ratings Affirmed At 'BBB'; Outlook Negative Aligned To The Sovereign BBB Negative BBB Negative Affirmation

Linkoping (Municipality of)

EMEA LRG 5/1/2020 Ratings Affirmed At 'AA+/A-1+'; Outlook Stable AA+ Stable AA+ Stable Affirmation

Norrtalje (Municipality of)

EMEA LRG 5/1/2020 Ratings Affirmed At 'AA+/A-1+'; Outlook Stable AA+ Stable AA+ Stable Affirmation

Rome (City of)

EMEA LRG 5/1/2020 Outlook Revised To Negative; 'BBB-' Rating Affirmed BBB- Stable BBB- Negative Outlook revision to negative

British Columbia Ferry Services Inc.

Americas Transport Infrastructure 5/1/2020 Outlook Revised To Negative From Stable; 'AA-' Ratings Affirmed AA- Stable AA- Negative Outlook revision to negative

Queen's University

Americas Higher Education 5/5/2020 Ratings Affirmed At 'AA+'; Outlook Is Stable AA+ Stable AA+ Stable Affirmation

Lower Austria (State of)

EMEA LRG 5/6/2020 Outlook Revised To Negative; 'AA/A-1+' Ratings Affirmed AA Stable AA Negative Outlook revision to negative

Autonomous Community of Aragon

EMEA LRG 5/8/2020 Rating Affirmed At 'BBB+'; Outlook Stable BBB+ Stable BBB+ Stable Affirmation

Basel-Country (Canton of)

EMEA LRG 5/8/2020 'AA+/A-1+' Ratings Affirmed; Outlook Stable AA+ Stable AA+ Stable Affirmation

Huddinge (Municipality of)

EMEA LRG 5/8/2020 'AA+/A-1+' And 'K-1' Ratings Affirmed; Outlook Stable AA+ Stable AA+ Stable Affirmation

Basel-City (Canton of)

EMEA LRG 5/8/2020 Affirmation AAA Stable AAA Stable Affirmation

Autonomous Community of Madrid

EMEA LRG 5/8/2020 Affirmed At 'A-/A-2 On Strong Central Government Support; Outlook Remains Positive A- Positive A- Positive Affirmation

Buenos Aires (City of)

Americas LRG 5/12/2020 Ratings Downgraded On Tighter Foreign Exchange Controls And Liquidity Pressure B- Negative CCC+ Negative Downgrade

Cordoba (Province of)

Americas LRG 5/12/2020 Ratings Downgraded On Tighter Foreign Exchange Controls And Liquidity Pressure B- Negative CCC Negative Downgrade

Neuquen (Province of)

Americas LRG 5/12/2020 Ratings Downgraded On Tighter Foreign Exchange Controls And Liquidity Pressure B- Negative CCC- Negative Downgrade

Rio Negro (Province of)

Americas LRG 5/12/2020 Ratings Downgraded On Tighter Foreign Exchange Controls And Liquidity Pressure B- Negative CCC Negative Downgrade

Salta (Province of)

Americas LRG 5/12/2020 Ratings Downgraded On Tighter Foreign Exchange Controls And Liquidity Pressure B- Negative CCC Negative Downgrade

Haldimand County

Americas LRG 5/13/2020 Ratings Affirmed At 'AA'; Outlook Stable, Full Analysis AA Stable AA Stable Affirmation

Winnipeg Airports Authority Inc.

Americas Transport Infrastructure 5/13/2020 'A+' Ratings Affirmed; Outlook Remains Negative A+ Negative A+ Negative Affirmation

McMaster University

Americas Higher Education 5/14/2020 Ratings Affirmed At 'AA'; Outlook Remains Stable AA Stable AA Stable Affirmation

Solothurn (Canton of)

EMEA LRG 5/15/2020 Ratings Affirmed At 'AA+'; Outlook Stable, Full Analysis AA+ Stable AA+ Stable Affirmation

Buenos Aires (Province of)

Americas LRG 5/15/2020 Rating Lowered To 'SD' From 'CC' On Missed Payment CC Negative SD Downgrade

Oslo (City of)

EMEA LRG 5/15/2020 'AAA' Ratings Affirmed; Outlook Stable AAA Stable AAA Stable Affirmation

Umbria (Region of)

EMEA LRG 5/15/2020 Rating Affirmed At 'BBB'; Outlook Negative, Reflecting That On The Sovereign BBB Negative BBB Negative Affirmation

Lazio (Region of)

EMEA LRG 5/15/2020 Rating Affirmed At 'BBB'; Outlook Negative, Reflecting That On The Sovereign BBB Negative BBB Negative Affirmation

Stockholm (City of)

EMEA LRG 5/15/2020 'AAA/A-1+' Ratings Affirmed; Outlook Remains Negative AAA Negative AAA Negative Affirmation

Gironde (Department of)

EMEA LRG 5/15/2020 Outlook Revised To Negative On Mounting Debt; ‘AA-/A-1+’ Ratings Affirmed AA- Stable AA- Negative Outlook revision to negative

Campania (Region of)

EMEA LRG 5/15/2020 Ratings Affirmed At 'BBB-'; Outlook Is Positive BBB- Positive BBB- Positive Affirmation

Stavanger (Municipality of)

EMEA LRG 5/15/2020 Ratings Affirmed At 'AA+/A-1+'; Outlook Stable AA+ Stable AA+ Stable Affirmation

Balearic Islands

EMEA LRG 5/15/2020 Ratings Affirmed At 'BBB+', Outlook Remains Stable BBB+ Stable BBB+ Stable Affirmation

Manitoba (Province of)

Americas LRG 5/15/2020 Outlook Revised To Stable From Positive On Recession's Impact; 'A+' Ratings Affirmed A+ Positive A+ Stable Outlook change to stable from positive

Prince Edward Island (Province of)

Americas LRG 5/15/2020 Outlook Revised To Stable From Positive On COVID-19 Effects, 'A' Ratings Affirmed A Positive A Stable Outlook change to stable from positive

British Columbia (Province of)

Americas LRG 5/15/2020 Outlook Revised To Negative From Stable On Potential Fiscal Weakening AAA Stable AAA Negative Outlook revision to negative

Kyiv (City of)

EMEA LRG 5/15/2020 Affirmation B Stable B Stable Affirmation

Brno (City of)

EMEA LRG 5/15/2020 Affirmation AA- Stable AA- Stable Affirmation

Hauts-de-Seine (Department of)

EMEA LRG 5/15/2020 Affirmation AA Stable AA Stable Affirmation

Seine-et-Marne (Department of)

EMEA LRG 5/15/2020 Affirmation AA Stable AA Stable Affirmation

Regina (City of)

Americas LRG 5/19/2020 Affirmation AAA Stable AAA Stable Affirmation

Buenos Aires (Province of)

Americas LRG 5/19/2020 Province of Buenos Aires Rating On Long-Term Par Bonds Lowered To 'D' From 'CC' CC D Downgrade

Wheatley Housing Group Ltd.

EMEA Social Housing 5/21/2020 Affirmation A+ Stable A+ Stable Affirmation

This report does not constitute a rating action.

Primary Credit Analysts:Felix Winnekens, New York + 1 (212) 438 0313;
felix.winnekens@spglobal.com
Daniela Brandazza, Mexico City (52) 55-5081-4441;
daniela.brandazza@spglobal.com
Felix Ejgel, London (44) 20-7176-6780;
felix.ejgel@spglobal.com

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