On Feb. 18, 2003, Standard&Poor's Rating Services 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 sovereign credit rating on the republic to 'CCC' from 'B' and affirmed its 'C' short-term sovereign credit ratings. 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 in 2005; however, the terms and conditions of this debt allow bondholders to exercise a "put" option
