NEW YORK (Standard&Poor's) Feb. 13, 2003--Standard&Poor's Rating Services said today that it lowered its long-term foreign currency credit rating on the Republic of Paraguay to 'SD' (Selective Default) from 'B-' and its short-term foreign currency credit rating to 'SD' from 'C'. At the same time, Standard&Poor's lowered its long-term local currency credit rating on the republic to 'CCC' from 'B' and affirmed its 'C' short-term local currency credit rating. The outlook on the long-term local currency rating remains negative. The rating actions are based upon the failure of the government of Paraguay to comply with the "put" option exercised by local bondholders of U.S. dollar-denominated obligations. The bonds, with US$20 million currently outstanding, mature
