Fitch revises Porto's Outlook to Positive; Affirms at 'BB+' and acknowledges the city's prudent administration

Porto is the second-largest cultural, administrative and economic Portuguese centre, with an estimated population of 214,000 in 2015.

Fitch Ratings has revised the Outlook on the City of Porto's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) to Positive from Stable and affirmed the IDRs at 'BB+'. 

Porto's ratings remain constrained by the Portuguese sovereign (BB+/Positive), in accordance with Fitch's criteria. 

Porto's accounts and budgets are overseen by the central government and its financial liabilities are approved by the national Court of Accounts, like with other cities in Portugal.

Porto's intrinsic credit profile is more robust than its ratings indicate, due to the city's healthy budgetary performance and its moderate debt, as well as the strong oversight by the central government. 

Prudent administration and Porto's role as service centre in north Portugal are also credit-positive.

Also, Porto has no contingent liabilities and retains control of the public sector, which posted a surplus in 2016. Disclosure of information is satisfactory and precise, including the annual financial results of all public bodies within its scope.

Municipal elections are set to take place in October 2017, and Fitch expects a continuation of the city's prudent financial policy.