Fitch: Rio de Janeiro BBB

Fitch Ratings said it assigned to the City of Rio de Janeiro a foreign-currency long-term rating BBB, local-currency long-term rating of BBB, foreign-currency short-term rating at F2, local-currency short-term rating at F2, national long-term rating at AA+(bra) and national short-term rating at F1+(bra).

The ratings reflect the fact that the federal government of Brazil is the city's main creditor, responsible for about 81% of the outstanding debt in 2010, Fitch said.

Nevertheless, magnified operating expenditures coupled with higher levels of indebtedness could deteriorate Rio's operating performance, thus contributing to a negative rating action, the agency said.

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