Банкеръ Weekly



Standard and Poor's decision to upgrade Bulgaria's credit rating of the foreign currency-denominated non-guaranteed debt from BB- with positive outlook to BB, and the long-term state-guaranteed credit rating in local currency from BB to BB+, is a result of the quick reduction of the country's foreign debt and the favourable prospects for production and export, reflecting the successful structural reforms and the strict macroeconomic policies, the international rating agency's announcement reads. Standard Poor's analysts underline that within the first nine months of 2002 Bulgaria's external debt dropped from 65% to 50% of the gross domestic product (GDP).The rating agency's experts point out that despite the slump in the production of EU member countries, which are Bulgaria's main trade partners, the country's real GDP is expected to report a 4.3% growth in the end of 2002. They preestimate that Bulgaria's GDP will be increased between 4.5% and 5.5% over the next few years.The expectations that our country will be admitted to NATO in November has also played a significant role for upgrading its rating.The first credit rating was assigned to Bulgaria at the height of the financial crisis in September 1996 and it was adequate to the situation of the country's economy. Back then the international rating agency Moody's assigned C3 rating of Bulgaria's long-term foreign currency-denominated debt. This is the lowest possible rating and it practically meant that the country was on the verge of failure, as the actual situation was. In 1997 the rating remained unchanged, but a year later Moody's took Bulgaria out of the group of countries, threatened by insolvency, assigning it B3, folowed by B2 in 1998. In 1999 Bulgaria's economy was assessed by Standard Poor's and Fitch IBKA, which ungraded its rating of long-term foreign currency-denominated debt to B+ and the rating remained unchanged till December 2001.In the beginning of 2001 Moody's raised Bulgaria's rating from B2 to B1. Standard Poor's and Fitch IBKA followed the example and in mid-December upgraded the country's rating of long-term foreign currency-denominated debt from B+ to BB-.

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