Fitch Ratings has downgraded Croatia's Long-Term Local Currency (LTLC) IDR to 'BB' from 'BB+'. The outlook is negative.
Fitch also downgraded the ratings on Croatia's long-term senior unsecured local currency bonds to 'BB' from.
Fitch is expected to release a detailed report and Croatia's ratings on July 29.
In a comment issued on Friday, Fitch said the Short-Term Foreign Currency (STFC) IDR had been affirmed at 'B' and a new Short-Term Local Currency (STLC) IDR of 'B' had been assigned.
Under EU credit rating agency (CRA) regulation, the publication of sovereign 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 there is a change in our criteria that we believe makes it inappropriate for us to wait until the next scheduled review date to update the rating or Outlook/Watch status," the agency said.
The next scheduled review date for Fitch's sovereign rating on Croatia is 29 July, but Fitch believes that a portfolio review is now warranted based on recent changes to our criteria.