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Sovereign ratings wrap: Fitch downgrades Lebanon; S&P upgrades Fiji

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Sovereign ratings wrap: Fitch downgrades Lebanon; S&P upgrades Fiji

S&P Global Market Intelligence presents a summary of ratings actions on sovereigns and other key territories from Aug. 19 to Aug. 25.

EUROPE

* Moody's revised the outlook on Lithuania to positive from stable and affirmed its long-term issuer and senior unsecured ratings at A3, citing the continued enhancement of the country's fiscal strength, aided by gradually declining government debt relative to GDP, improving debt affordability and a decrease of aging-related fiscal risks. The rating agency also affirmed the country's domestic currency short-term at (P)P-2.

* Moody's revised the outlook on Kazakhstan to positive from stable and affirmed its long-term local- and foreign-currency issuer rating at Baa3. The outlook revision reflects the country's increasing economic resilience, with real GDP growth expected to remain around 4% over the next two to three years amid increasing contributions from the nonhydrocarbon sector.

* Fitch Ratings affirmed Bulgaria's long- and short-term foreign- and local-currency issuer default ratings at BBB/F2, with a positive outlook on the long-term ratings. Fitch said the country's ratings reflect its sound external and public finances, as well as credible policy framework toward joining the eurozone, offset by its comparably lower income levels and unfavorable demographics.

* S&P Global Ratings affirmed Tajikistan's long- and short-term foreign- and local-currency sovereign credit ratings at B-/B, with a stable outlook. The rating agency said the $4 billion Rogun Dam hydropower project, if completed, could ultimately support an improvement in the country's economy, but its financing could put pressure on the ratings if the vast majority of funding will have to be covered by the government.

AMERICAS

* Fitch revised the outlook on Ecuador to stable from negative and affirmed the country's issuer default ratings at B-/B, citing developments that have helped mitigate sovereign financing risks in the near term. Fitch said a three-year $4.2 billion financing deal with the International Monetary Fund "meaningfully reduced" the country's financing gap for 2020 and provided "an anchor for fiscal consolidation and structural reforms."

* Fitch revised the outlook on Suriname to negative from stable and affirmed its issuer default ratings at B-/B, citing expectations of an increased government debt-to-GDP ratio due to large fiscal deficits. The rating agency expects Suriname's government deficit to remain elevated near 10% of GDP through next year and the debt-to-GDP ratio to rise to 79% in 2019 from 72% a year ago.

ASIA-PACIFIC

* S&P upgraded Fiji's long-term sovereign credit ratings to BB- from B+, with a stable outlook, citing policy continuity following two successive democratic elections and expectations that the government's medium-term fiscal consolidation plan will help stabilize the country's debt burden through fiscal 2022. Fiji's short-term ratings were affirmed at B.

* Fitch affirmed Singapore's issuer default ratings at AAA/F1+, citing the city-state's "exceptionally strong" external and fiscal balance sheets, favorable business environment and sound macroeconomic policies, among others. The outlook is stable.

MIDDLE EAST AND AFRICA

* Fitch downgraded Lebanon's issuer default ratings to CCC/C from B-/B, citing the intensifying pressure on the country's financing model, which raises risks to the government's debt-servicing capacity. Fitch typically does not assign outlooks for sovereigns with a rating of CCC or below.

* Meanwhile, S&P affirmed Lebanon's sovereign credit ratings at B-/B, with a negative outlook. The action reflects S&P's view that, despite a significant decline in investor confidence, the Lebanese central bank's usable foreign exchange reserves remain sufficient to service government debt in the near term.

* S&P affirmed Iraq's sovereign credit ratings at B-/B, with a stable outlook, on expectations that the country's economic growth will rebound in 2019 after two years of decline. The rating agency said the government is still expected to record a fiscal deficit in 2019 and in the coming years due to lower oil prices and large spending needs.

* S&P downgraded Zambia's sovereign credit ratings to CCC+/C from B-/B, due to the country's low foreign currency reserves and rising external debt-service obligations. The outlook on the long-term rating is stable, reflecting the rating agency's view that the government can still meet its commercial debt obligations in the coming 12 months.

* Fitch downgraded Lesotho's long-term issuer default ratings to B from B+ and revised the outlook to stable from negative, citing the ongoing political disruptions that have hampered the implementation of measures to address the country's deteriorating public finances and external liquidity. The country's short-term ratings were affirmed at B.

* Moody's affirmed Tanzania's long-term issuer ratings at B1, citing the country's weak institutional framework and low fiscal strength, balanced against the economy's diversification. The outlook was maintained at negative, reflecting the rating agency's assessment that unpredictable policy is hampering Tanzania's growth and access to financing.

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