The Icesave veto could lead to delays to and revisions of the International Monetary Fund (IMF) program. As a result, we could lower our ratings on Iceland by one to two notches within a month. The local currency ratings are vulnerable due to continuing constraints to monetary flexibility. We are placing our 'BBB-/A-3' foreign currency and 'BBB+/A-2' local currency ratings on Iceland on CreditWatch with negative implications. On Jan. 5, 2010, Standard&Poor's Ratings Services placed its 'BBB-/A-3' foreign currency and 'BBB+/A-2' local currency sovereign credit ratings on the Republic of Iceland on CreditWatch with negative implications. The CreditWatch placement indicates the likelihood of a downgrade if political uncertainty grows and external liquidity pressures persist in the wake of
