The threats to Iceland's external financing requirements have receded. We are therefore affirming our 'BBB-/A-3' foreign-currency sovereign credit ratings on Iceland. Iceland likely would have limited additional flexibility to service local-currency debt if not for current and capital account controls. We are lowering our long-term local-currency rating to 'BBB-' from 'BBB'. We are removing both the foreign- and local-currency ratings from CreditWatch negative. The outlook is negative, reflecting the risks to Iceland's economic recovery and debt reduction. On May 17, 2011, Standard&Poor's Ratings Services affirmed its 'BBB-/A-3' long- and short-term foreign-currency sovereign credit ratings on the Republic of Iceland. At the same time, we lowered the long-term local-currency sovereign credit rating to 'BBB-' from 'BBB' and affirmed the
