TEXT - Fitch to rate Costa Rica's upcoming global bond
Nov 14 - Fitch Ratings has assigned Costa Rica's upcoming benchmark global bond maturing in 2022 an expected rating of 'BB+'. The expected rating is in line with Costa Rica's Foreign Currency Issuer Default Rating, which has a Stable Outlook. The receipts from this issuance will be used for the refinancing of external and domestic debt obligations in 2012 and 2013. Costa Rica's 'BB+' ratings are supported by its institutional strength and favorable social indicators. A history of political and macroeconomic stability combined with a skilled labor force continues to attract foreign direct investment and foster the development of highly competitive export-oriented industries. Costa Rica's ratings are constrained by the country's narrow and pro-cyclical revenue base, relatively high fiscal deficits and expenditure rigidities which limit its fiscal flexibility. However, Costa Rica's low government indebtedness relative to peers (30.8% in 2011 compared with 40.3% for the 'BB' median) gives it some space to deal with fiscal pressures.