On Aug. 24, 2004, Standard&Poor's Ratings Services affirmed its 'B+' long-term foreign, 'BB' long-term local, , and 'B' short-term local and foreign currency sovereign credit ratings on the Federative Republic of Brazil. Standard&Poor's also affirmed the positive outlook on the long-term foreign currency rating, assigned Dec. 11, 2003, which reflects declining external vulnerability underpinned by ongoing marked improvement in Brazil's trade balance amid continued fiscal and monetary discipline. The stable outlook on the long-term local currency rating was also affirmed. The ratings on Brazil are constrained by: A large general government debt burden that, despite ongoing improvement, continues to be vulnerable to interest- and exchange-rate movements. Net general government debt is projected at about 63% of
