In our opinion, Andorra's government and regulators have made substantial progress in protecting the financial system from risks related to Banca Privada d'Andorra. We consider that Andorra has stable political institutions and strong fiscal and debt positions, but information gaps regarding external data, potential contingent liabilities related to banks, and our view of limited growth prospects and economic concentration risk constrain the ratings. We are affirming our 'BBB-/A-3' ratings on Andorra. The negative outlook indicates that there is at least a one-in-three likelihood of a downgrade within the next 18 months if we foresee financial market turbulence in Andorra, delays to banking supervision reform, or other adverse changes that can hurt the government's finances or the country's growth prospects. On
