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Fitch upgrades Bulgarian Development Bank's ratings

Fitch Ratings on Dec. 11 upgraded Bulgarian Development Bank AD's long-term issuer default rating to BBB from BBB-, revised its support rating floor to BBB from BBB- and upgraded the short-term issuer default rating to F2 from F3.

The outlook on the long-term issuer default rating is stable. The lender's support rating was affirmed at 2.

The actions follows the agency's upgrade of Bulgaria's long-term foreign- and local-currency issuer default ratings to BBB from BBB- with stable outlooks Dec. 1.

Fitch said Bulgarian Development Bank's ratings are in line with those of Bulgaria, reflecting its view of a high probability of state support for the lender in case of need.

The agency expects Bulgaria's government to pre-emptively step in to prevent the bank's failure and avoid bailing in senior creditors given that the vast majority of Bulgarian Development Bank's funding is either sourced from or guaranteed by the state.