OREANDA-NEWS. Fitch Ratings has downgraded the Polish Region of Malopolska's Long-Term Local Currency (LTLC) Issuer Default Rating (IDR) to 'A-' from 'A'. The IDR has a Stable Outlook. A full list of ratings is at the end of this commentary.

Under EU credit rating agency (CRA) regulation, the publication of International Public Finance reviews is subject to restrictions and must take place according to a published schedule, except where it is necessary for CRAs to deviate from this in order to comply with their legal obligations. Fitch interprets this provision as allowing us to publish a rating review in situations where we believe makes it inappropriate for us to wait until the next scheduled review date to update the rating or Outlook/Watch status. In this case the deviation was caused by our downgrade of the sovereign's LTLC IDR on 22 July 2016.

The next review date for the Region of Malopolska will be in the first quarter of 2017.

The Malopolska Region's other ratings were last affirmed on 22 July 2016 and are not affected by the recent sovereign downgrade.

KEY RATING DRIVERS

The rating action reflects the following rating drivers and their relative weights:

HIGH

Following the downgrade of Poland's LTLC IDR on 22 July 2016 (Please see 'Fitch Applies Criteria Changes to Polands's Ratings' at www. fitchratings. com) we have taken similar rating action on the Malopolska, as local and regional governments' IDRs usually cannot be higher than the sovereign's. Under our criteria only in exceptional circumstances can a local or regional government be rated above the sovereign.

The National Long-Term Rating could be subject to changes following potential recalibration of the National Rating scale.

RATING SENSITIVITIES

An upgrade of the sovereign rating, accompanied by a solid regional operating performance, declining pressure on debt-funded capex and low indirect risk, could trigger positive rating action.

A negative rating action could arise from a downgrade of the sovereign ratings or if Malopolska's operating performance consistently weakens and direct and indirect debt increases above 80% of current revenue on a sustained basis.

The current ratings are as follows:

-Long-Term Local Currency IDR: downgrade to 'A-' from 'A'; Outlook Stable

-Long-Term Foreign Currency IDR: 'A-'; Outlook Stable.

-National Long-Term Rating: 'AA+(pol)'; Outlook Stable