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Standard & Poor’s Ratings Services has assigned its ‘BBB+’ long-term foreign currency senior unsecured debt rating to the Republic of Poland’s (foreign currency BBB+/Negative/A-2; local currency A/Negative/A-1) €500mn floating-rate note issue due in 2006.

The issue is the third under the €5bn Euro MTN (EMTN) programme launched by Poland earlier this year. Including the €500mn issue, Poland has issued a total of €2.8bn under the EMTN programme so far in 2003.

“The rating on the issue reflects the ‘BBB+’ long-term foreign currency sovereign credit rating on Poland,” says Standard & Poor’s credit analyst Beatriz Merino.

The factors supporting the ratings on Poland include a manageable external liquidity situation, as well as a competitive, resilient, and increasingly diversified export sector, which is expected to lead Poland ‘s incipient economic recovery.

“However, the need to implement fiscal reforms sufficient to prevent a further deterioration of fiscal indicators continues to weigh on the ratings,” says Merino. “In the absence of far-reaching fiscal reforms, Standard & Poor’s projects a widening of the general government deficit to more than 7% of GDP in 2004-05, and a rapid increase in the debt-to-GDP ratio, to more than 60% of GDP by 2006. This would, in addition, delay Poland’s EMU accession to beyond 2010.”