S&P lifts Bulgaria from junk

Standard & Poor's said it raised its foreign currency sovereign credit ratings on the Republic of Bulgaria to BBB-/A-3 from BB+/B and its local currency sovereign credit ratings on Bulgaria to BBB/A-3 from BBB-/A-3.

S&P said the upgrade reflects the country's bright economic prospects and prudent fiscal policies. The outlook is stable.

"Bulgaria's improved creditworthiness is supported by its high growth potential, prudent fiscal policies, and European integration, which is likely to lead to EU membership in 2007. The integration process will culminate in Bulgaria joining the European Monetary Union (EMU), most likely in 2010," said S&P credit analyst Moritz Kraemer. "EU accession, meanwhile, is well on track for completion in 2007, following the conclusion of the negotiations in June 2004. This should lock in the structural reform process and provide for potentially significant transfer payments, which would contribute to the alleviation of Bulgaria's weak external liquidity."

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