S&P rates Slovak notes A

Standard & Poor's said it assigned an A long-term senior unsecured debt rating to the Slovak Republic's (A/stable/A-1) upcoming €1 billion eurobond maturing March 2021. The bond will be issued under Slovakia's new €2 billion euro medium-term note program, which at the same time is assigned a long-term rating of A and a short-term rating of A-1.

S&P said the ratings on the Slovak Republic are supported by rapid progress in public sector reform, strong growth prospects and the prospect of entry into the Eurozone by 2009. Despite an increase in the general government deficit in 2005 to 4.9% of GDP due to costs resulting from European Union accession, pension reform and debt forgiveness, the agency said public finances remain on a sustained path of improvement.

The ratings remain constrained by the country's only moderate wealth levels and inefficient social security system, the agency said. At $8,520 in 2005, per capita wealth in the country significantly trailed the $12,000 median for an A-rated sovereign.

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