Fitch Ratings has affirmed the Armenian City of Yerevan’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at ‘B+’ with Positive Outlooks.

According to the agency, Yerevan’s IDRs are constrained by Armenia’s sovereign IDRs (B+/Positive) as the city’s standalone credit profile (SCP) is assessed at ‘bb+’. The city’s SCP reflects a combination of a ‘Vulnerable’ risk profile assessment and strong debt metrics.

“Yerevan is Armenia’s capital and its largest metropolitan area. It is the country’s largest market with a developed services sector and most populous community, with 1.1 million people. Yerevan’s wealth metrics remain relatively modest in the international context affecting the city’s overall financial profile. Yerevan remains debt free, although it can borrow on the domestic debt capital market, subject to certain restrictions,” Fitch writes.


The agency is certain that the city’s tax base is moderate in size and has limited prospects to grow due to the relatively weak local economy.

Yerevan’s budget revenue is mainly composed of central government transfers (2018: 66% of total revenue), followed by non-tax revenue (13%) and asset sales (6%). Yerevan’s ability to generate additional revenue in response to possible economic downturns is very limited, therefore the city’s revenue adjustability is assessed as weak.

“Fitch’s rating case expects close to balanced budgets in 2019-2023 with occasional minor deficits to be funded by cash reserves and minimal new debt,” Fitch noted.