On Feb. 28, 2006, Standard&Poor's Ratings Services raised its long-term counterparty credit ratings on Israel-based Bank Leumi le-Israel B.M. and Bank Hapoalim B.M. to 'A-' from 'BBB+', following a greater weighting of potential government support in the banks' creditworthiness. At the same time, Standard&Poor's affirmed its 'A-2' short-term ratings on the two banks. The outlook on both banks is stable. The upgrades reflect Standard&Poor's opinion that the government of the State of Israel (foreign currency, A-/Stable/A-1; local currency, A+/Stable/A-1) would likely provide extraordinary assistance to the systemically important banks in the country in the event that these banks encounter distress. Extraordinary government support refers to specific actions--recapitalization, liquidity support, or the purchase of problem
