Fitch Affirms Region of Languedoc-Roussillon-Midi-Pyrennes' BT Programme 'F1 '
The final rating is contingent upon the receipt of final documentation conforming to information already received.
KEY RATING DRIVERS
The BT programme's expected rating is aligned with the region of LRMP's Short-term Issuer Default Rating (IDR) as the notes under the programme are expected to constitute senior, unconditional, unsecured and unsubordinated liabilities of the region.
The rating is assigned to the programme and not to the notes under the programme. Fitch expects the notes issued under the programme to rank equally with the region of LRMP's other unsecured and unsubordinated obligations.
Under the BT programme, the region of LRMP plans to achieve maximum issues of about EUR50m. The BT programme is backed by sufficient committed short-term credit lines for a total EUR200m and available revolving lines with EUR103m outstanding. Fitch will monitor the level of back-up line in the medium term in accordance with the amount of each issue.
Since 1 January 2016, Midi-Pyrenees has merged with Languedoc-Roussillon. Despite an expected weakening of the current margin, we expect that the region of Languedoc-Roussillon-Midi-Pyrenees would be able to maintain a sound financial and economic profile compatible with the current ratings. While Fitch expects the merger to have a negative impact on the debt metrics of the new region via a weakening of the debt payback ratio, debt metrics should recover by end-2018 to levels compatible with the current ratings through the implementation of corrective measures.
Changes to the region of Languedoc-Roussillon-Midi-Pyrenees' Short term IDR would be reflected in the BT programme's rating.
For more information on Languedoc-Roussillon-Midi-Pyrenees' rating sensitivities see "Fitch Affirms Region of Midi-Pyrenees at 'AA'; Outlook Stable" dated 20 November 2015 at www.fitchratings.com.