LITHUANIA RECEIVES INVESTMENT-GRADE CREDIT RATING.

Finance Minister Algirdas Semeta announced on June 9 that Lithuania has received an investment-grade international credit rating from the U.S. Standard and Poor’s rating agency. (BNS, Russian news agencies, June 9) This rating, which is the third positive assessment Lithuania has received from international credit agencies over the past 10 months, is the first investment-grade rating issued to any of the Soviet successor states. This rating will lower Lithuania’s costs of borrowing abroad, and will help integrate Lithuania into the international financial system.

Standard and Poor’s gave Lithuanian government long-term hard-currency debt a BBB- rating, while long-term litas debt received a BBB+ rating. These were better than the speculative-grade ratings earlier afforded Lithuania by two other international agencies: Moody’s (which gave Lithuania a "Ba2" rating) and IBCA (which gave Lithuania a "BB+"). According to Semeta, the Standard and Poor’s rating will allow Lithuania to lower the interest rate it will offer on its upcoming $200 Eurobond issue by as much as a full percentage point. The Eurobond sale, which is organized by the American J. P. Morgan investment bank, is scheduled for mid-July.

The Standard and Poor’s rating underscored how far Lithuania, which in the early 1990s was regarded as the laggard in Baltic economic reform, has come in the past two years. It also shows that fears voiced by Western investors early this year about the possible abandonment of Lithuania’s modified currency board exchange-rate regime would not seem to have had a serious impact on Lithuania’s creditworthiness.

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