Correction: Fitch Rates Dominican Republic's New Bonds 'B-'.

NEW YORK -- (This is an amended version of a press release issued yesterday and contains revised Brady bonds information in the second paragraph.)

Fitch Ratings-NY-May 12, 2005: Fitch Ratings, the international rating agency, has assigned long-term foreign currency ratings to the new bonds issued by the Dominican Republic as a result of its debt exchange of 'B-'. Approximately US$456 million aggregate amount of 9.50% amortizing bonds due 2011 and US$574 million aggregate amount of 9.04% amortizing bonds due 2018 are affected by this rating action. Should the Dominican authorities meet the performance criteria included in the country's International Monetary Fund (IMF) program and pursue sound macroeconomic policies, multilateral financing should be assured and the government's liquidity position would remain stable. With this as a backdrop, Fitch would consider a Positive Outlook or even an upgrade of the ratings in the medium-term.

Fitch deemed the exchange offer to be a distressed debt exchange and downgraded the eligible bonds and the long-term foreign currency issuer rating to 'DDD' on 5 May 2005. If the government is committed to servicing the eligible bonds not extinguished with the exchange on time and in full, the default ratings will be removed on 6 June 2005. As local currency obligations were excluded from the debt exchange and the government's liquidity position has improved as a result of the exchange, the long-term local currency (Dominican peso) rating has been upgraded to 'B' from 'CCC+'. Following the rating action, the Rating Outlook is Stable. Similarly, the Dominican Republic's country ceiling and the ratings on Brady bonds, which were also not eligible for the exchange, have been upgraded to 'B-'.

The exchange has improved the Dominican Republic's near term credit profile due to the significant debt service relief achieved in 2005 and 2006. However, other fundamental credit concerns remain. Meeting the sovereign's debt service requirement remains contingent upon complying with the performance criteria contained in its Stand-by Agreement with the IMF. While it appears that quantitative performance criteria and indicative targets should be easily met, Fitch remains concerned with the authorities' ability to stay on track with structural performance criteria and benchmarks given past difficulties. Any additional disbursement delays could make meeting even modest debt service requirements challenging as the public sector's external debt service could still be upwards of US$829 million this year compared with international reserves of around US$1.2 billion. Similarly, debt service could increase to around US$1 billion in 2006, compared with forecasted reserve levels of US$1.8 billion. In addition, medium-term export growth prospects remain below average due to the expiry of textile quotas under the WTO's Agreement on Textiles and Clothing and the short-lived gains in competitiveness from the devaluation.

Stronger than expected fiscal results and economic growth during the first quarter of this year as well as the debt restructuring, could reduce the public sector's total financing needs to an estimated 4.2% of GDP in 2005 from 8.4% in 2004, supporting the 'B-' rating of the new bonds. A comparatively orderly exchange undertaken with the support of the IMF and official bilateral creditors, while at the same time remaining current on its obligations to bondholders, signals the Dominican authorities' commitment to make best efforts to normalize relations with creditors.

Nevertheless, maintaining improvements in public finances and strengthening the financial system will require significant structural reforms, a process that could be complicated by the 2006 upcoming congressional elections. Improving export prospects, which in turn could benefit reserve growth beyond 2006, will also be dependent upon the eventual approval of CAFTA, a process which is becoming an increasingly uphill battle in both the United States and some of the prospective member countries of CAFTA.