Scope Ratings reviews its ratings either yearly, or every six months in the case of sovereigns, sub-sovereigns and supranational organisations. Monitoring reviews are unrelated to the calendar that outlines public finance rating actions.

Scope performs monitoring reviews to determine whether outstanding ratings remains proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology/ies, latest developments, and the rated entity’s financial and operational aspects relative to similarly rated peers; or through targeted reviews on an individual credit. Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for the City of Quimper (A+/Stable; S-1+/Stable) on 4 December 2020. This monitoring note does not constitute a rating action nor indicates the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated rating history can be found on www.scoperatings.com.

Key rating factors

The A+ rating is supported by Quimper’s prudent and effective budgetary management; strong operating performance; a low interest-payment burden; and a favourable debt profile. The city’s finances are resilient to the Covid-19 shock due to its mostly non-cyclical fiscal base, wide operating margins and a high share of capital expenditure which provide substantial budgetary leeway. While income has declined slightly and the city has incurred additional costs due to the health crisis, the impact on the city’s finances remains manageable. Scope expects the city to maintain a tight grip on expenditure and return to its positive pre-crisis trend of declining debt levels once the pandemic subsides. The supportive institutional framework for French municipalities also provides an additional buffer, via a compensation mechanism for local authorities who experience a marked decline in revenue as well as an increase in State grants to support local investment. The city’s credit challenges relate to its relatively elevated, albeit decreasing, direct debt levels; limited, though improving, budgetary flexibility; and a narrow economic base. The Stable Outlook reflects Scope’s view that the risks Quimper faces remain well balanced.

The methodology applicable for the reviewed rating(s) and/or rating Outlook(s) (Sub-sovereign Rating Methodology, 18 May 2020) is available on https://www.scoperatings.com/#!methodology/list.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Jakob Suwalski, Director

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