TEXT-S&P lowers Montenegro ratings to 'BB-';outlook stable
(The following statement was released by the rating agency)
June 13 -
-- Rapid deleveraging of Montenegro's financial sector continues, and we estimate GDP growth will decelerate to 0.5% this year.
-- In our view, Montenegro's fiscal consolidation program is at risk due to the protracted economic slowdown and the continuing accumulation of tax and other arrears in the economy.
-- We also believe that contingent liabilities will likely crystallize on the government's balance sheet due to payments due on state guarantees.
-- We are therefore lowering our long-term foreign and local currency sovereign credit ratings on Montenegro to 'BB-' from 'BB'.
-- The stable outlook balances our view of risks from any further deterioration in the external environment against the government's general willingness to pursue reforms that address economic weaknesses.
On June 13, 2012, Standard & Poor's Ratings Services lowered its long-term foreign and local currency sovereign credit ratings on the Republic of Montenegro to 'BB-' from 'BB'. At the same time we affirmed our short-term foreign and local currency ratings at 'B'. The outlook on the long-term ratings is stable.
Montenegro's '3' recovery rating reflects our opinion of a 50%-70% recovery in the event of a default. The transfer and convertibility (T&C) assessment remains at 'AAA'.
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