CORRECTED-TEXT - S&P rates Costa Rica's planned bond issue

Tue Nov 13, 2012 6:01pm EST

(Corrects headline to S&P, not Fitch)
    (The following statement was released by the rating agency)
    Nov 13 - Standard & Poor's Ratings Services today said it assigned its 'BB+'
foreign currency senior unsecured debt rating on the Republic of Costa Rica's
planned bond issue. We also assigned a '2' recovery rating, reflecting our
expectation of substantial (70%-90%) recovery in the event of default. The
planned note issue under Rule 144A Reg. S is expected to be in the range of $500
million to $1 billion.

Our ratings on Costa Rica are constrained by the country's limited monetary 
flexibility and rising fiscal pressures. Costa Rica's fiscal deficit 
(including the central government, the central bank, and decentralized 
government entities) will likely exceed 4% of GDP this year. The fiscal 
deficit was 4.7% of GDP in 2011 and 5.5% of GDP in 2010. Costa Rica's monetary 
rigidities reflect ongoing losses at the central bank, about 0.6% of GDP in 
2011, and a high, albeit declining, level of dollarization, at roughly 
one-third of the financial sector's claims and deposits.

Supporting the ratings are Costa Rica's stable political system, strong public 
institutions, rule of law, and general consensus on pro-growth, 
market-oriented policies. Comparatively high human development contributes to 
social stability and supports Costa Rica's strengthening prowess in exporting 
skill-based services. This, in turn, sustains solid long-term growth 
prospects, with real GDP growth per capita expected to average 2.2% between 
2012 and 2014. Growing international reserves, which are boosted by large 
ongoing and projected foreign direct investment, support external stability.

RELATED CRITERIA AND RESEARCH
     -- Costa Rica, March 13, 2012
     -- Sovereign Government Rating Methodology And Assumptions, June 30, 2011
     -- Introduction Of Sovereign Recovery Ratings, June 14, 2007

RATINGS LIST

Republic of Costa Rica
 Sovereign Credit Rating                BB/Stable/B

New Rating

Republic of Costa Rica
 Senior unsecured notes                 BB+
  Recovery Rating                       2

 (Caryn Trokie, New York Ratings Unit)
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