Request for comments - update of the Methodology for assigning credit rating to municipalities (expired)

Date created: 15-Oct-2018

BCRA invites all stakeholders to submit their comments on the exposed in the current document changes “Methodology for assigning credit ratings to Municipalities” to e-mail: methodologycomments@bcra-bg.com until November 14, 2018 year.

The main goal of the proposed change in the methodology for assigning of credit rating to municipality is an update regarding adopted changes in the legal framework concerning the assessment of the financial status of the local authorities, the adoption of additional indicators for assessing the debt and financial profile of the evaluated municipalities and introducing of current financial indicators, suitable for comparative analysis of the municipalities.
In order to achieve full compliance with the requirements of Council Directive 2011/85 / EU from 8 November 2011, regarding requirements for budgetary frameworks of the Member States based on their dialogue with the EC and developed and improved regulation, EU Member States publish and maintain a set of financial indicators that allow for an improved and broader analysis in a municipal rating report. The data is relevant for benchmarking and is updated periodically, providing clear and sustainable financial information.
BCRA proposal is to create a new section in the Methodology of Debt Financing of the Municipality. This section focuses on the debt profile of the municipality, including analysis of total debt and amount of annual debt repayments. The main indicators related to debt financing are analyzed and evaluated. This change will contribute to expanding the information and achieving a more comprehensive assessment of the financial status of the evaluated municipality.
Along with the above mentioned changes, some terminological clarifications and modifications are made, while maintaining the main factors observed so far, with a view to achieving consistency and comparability of results.

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