Jan 19 2018

Fitch announces Turkey office closure just before credit report due

Fitch Ratings said it will shut down its office in Istanbul, citing changes to its office network.

The announcement came hours before the company was due to publish an assessment of Turkey's credit rating.

“The decision reflects Fitch’s desire to maintain an optimal office network structure and sufficient level of resource in each geographic location in which it operates,” the company said in a statement on Friday.

President Recep Tayyip Erdoğan has warned Fitch and rival credit agency Moody’s that his government could sever ties with them, saying their reports on the country were politically-motivated. Both firms have cut Turkey's debt to junk.

Erdogan repeated his criticism of ratings agencies on Friday, saying their decisions were ideological and not based on the country's economic realities. Erdogan, only hours to Fitch's expected announcement over Turkey's credit rating, stated, "we still have not saved ourselves from credit agencies' ideologic approaches. They still say Turkey is not giving confidence. We will teach this lesson to them either way."

Fitch reduced its ratings on Turkish government debt to BB+, non-investment grade, a year ago, warning of "security challenges" and a planned constitutional referendum strengthening Erdogan's presidential powers, a step it said would entrench a system in which checks and balances have been eroded.

Fitch said it has a ratings portfolio of more than 75 issuers across various sectors in Turkey. Coverage of Turkish firms and transactions will remain unchanged, it said.