Fitch upgrades Lithuania, view to stable

Fitch Ratings said it upgraded Lithuania’s long-term foreign-currency issuer default rating to A- from BBB+ and revised its outlook to stable from positive.

The short-term foreign-currency issuer default rating also was upgraded to F1 from F2 and the country ceiling to AAA from A+.

The long-term local-currency issuer default rating was affirmed at A- with a stable outlook.

The upgrades include Lithuania’s senior unsecured foreign-currency bonds to A- from BBB+ and the ratings on its senior unsecured local-currency bonds were affirmed at A-.

The upgrades follow news that the European Commission’s Economic and Financial Affairs Council has recommended Lithuania becomes the 19th eurozone member Jan. 1 2015, which will be formally agreed by the European Council in July, Fitch said.

Euro adoption will enhance Lithuania’s economic policy coherence and credibility compared with the current exchange rate peg to the euro, the agency said.

It also will reduce credit risks associated with foreign-currency exposures on the sovereign’s balance sheet and in the banking system, as well the country’s still high level of net external debt, Fitch said.

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