OREANDA-NEWS. Corporate And Government Ratings: Methodology And Assumptions," published Nov. 19, 2013, on RatingsDirect). Among other factors, we do not rate the borough higher than the U. K. because we believe the borough lacks sufficient financial autonomy to effectively resist significant sovereign intervention, such as reductions or delays in central government transfers. A large share of the borough's revenues still comes from the central government. In addition, U. K. LRGs do not have formal powers to block changes to the institutional framework.

Our downward revision of the institutional framework for U. K. municipalities reflects that we anticipate a deterioration in the revenue and expenditure balances of U. K. municipalities (see "Cuts In Grants Are Weighing On U. K. Municipalities Ratings," published on Aug. 12, 2016).

OUTLOOK

The negative outlook reflects that on the U. K. sovereign. If we lowered the long-term rating on the U. K., we would lower the long-term rating on RBKC because we do not consider the borough to be rated above the sovereign.

We could revise the outlook to stable if we revised the outlook on the long-term sovereign credit rating on the U. K. to stable. At the same time, we would need to see RBKC continuing to perform in line with our base-case scenario.