site.btaS&P Raises Sofia's Credit Rating to BBB+

The S&P international rating agency Wednesday upgraded the long-term credit rating of Sofia Municipality from BBB to BBB+ with a stable outlook, the municipal press centre said. As the capital of Bulgaria, Sofia will benefit significantly from joining the eurozone, especially through increased economic growth, which will support the revenue side of the budget and improve access to capital markets at potentially lower financing costs, the S&P report stated.

According to the analysis, membership in the eurozone will facilitate the diversification of the municipality’s funding sources and will lead to a reduction in debt servicing costs. As the country’s administrative and financial centre, Sofia will be in a leading position to attract more foreign investment and integrate deeper into European supply chains. 

S&P predicts that over time, Sofia’s economy and tax revenues will strengthen, and access to European capital markets will improve, further diversifying funding sources.

“The upgrade is an assessment of Sofia’s stable financial position, as well as the expected benefits of Bulgaria’s upcoming accession to the eurozone,” Sofia Deputy Mayor Ivan Vassilev stated. Despite its good financial results and outlook and the fact that Sofia is the most developed region in Bulgaria, the capital's credit rating remains limited by the credit rating of the State, which cannot be exceeded.

Despite the positive assessment, the report also points out some risks and challenges to the capital’s development, which include the political instability at the national level in recent years and the delayed adoption of the 2025 state budget, which creates uncertainty in municipal planning, as well as the management of municipal companies, such as the high indebtedness of Toplofikatsiya Sofia.