Fitch assigns Lithuania Eurobond BBB

Fitch Ratings said it has assigned the Republic of Lithuania's expected five-year fixed-rate eurobond a BBB rating.

The agency said that the rating is in line with Lithuania's BBB long-term foreign currency issuer default rating, on which the outlook is negative.

"Lithuania's ratings are underpinned by political and institutional strengths associated with its membership of the European Union, a per capita income level higher than the BBB median and a low general government debt burden of 16% of GDP in 2008 - below the BBB median of 31%," said Eral Yilmaz, associate director in Fitch's emerging Europe sovereigns group.

"Nevertheless, Fitch is forecasting that the Lithuanian economy will contract 16% in 2009, which will increase pressure on the macroeconomic policy framework and make it harder for the government to keep the budget deficit under 3% of GDP."

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