We believe that the contemplated household debt forgiveness could pose a significant fiscal risk to Iceland. Depending on the scope of the write-down and the mode of financing, general government debt could rise substantially. We have therefore revised the outlook on Iceland to negative, reflecting our view that there is at least a one-in-three chance that we could lower the ratings within the next two years. We are affirming our 'BBB-/A-3' long- and short-term sovereign credit ratings on Iceland. On July 26, 2013, Standard&Poor's Ratings Services revised the outlook on the Republic of Iceland's long-term ratings to negative from stable. At the same time, we affirmed our 'BBB-/A-3' long- and short-term foreign and local currency sovereign credit ratings
