LONDON (Standard&Poor's) Nov. 21, 2006--Standard&Poor's Ratings Services assigned its 'AA-' senior unsecured debt rating to the Republic of Iceland's debut (foreign currency AA-/Negative/A-1+, local currency AA+/Negative/A-1+) €1 billion bond maturing in 2011. The issue represents the first euro benchmark bond issued by the Republic. The entire amount of the planned borrowed funds will be allocated toward strengthening the Central Bank of Iceland's foreign reserves. "The ratings on Iceland are supported by its stable and flexible political institutions, high level of prosperity, and strong long-term economic growth prospects," said Standard&Poor's credit analyst Eileen Zhang. "In the near term, however, the Icelandic economy faces stagnation in 2007 and the potential risk of a hard landing, as
