Fitch Ratings: Methodology for International Regional and Local Governments in Spanish Language.

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 4, 2003

Recognizing recent growth and interest in subnational government finance, Fitch Ratings aids investors, debt security issuers, lenders and government authorities in Spain and throughout Latin America with an updated rating criteria report. The publication 'Metodologia Internacional para la Calificacion Financiera de los Entes Territoriales y Municipales' outlines the main factors that determine the credit quality of securities issued by subnational entities.

The methodology is applicable to all governmental units under sovereigns (municipalities, regions, states or provinces) outside the United States. Fitch first published the criteria in English in 2002 under 'International Methodology for Regional and Local Governments.' Fitch has also published separately general and specialized criteria reports applicable to similar entities of the United States.

Recognizing the rapid growth of subnational borrowing and published ratings in Spanish-speaking countries, especially Mexico and Spain, Fitch contributes to the understanding of public finance in newly developing markets. Fitch also acknowledges that decentralization has been a major force in driving local authorities to seek non-traditional sources of financing, and that governments will often seek first an independent third-party credit opinion of themselves as issuers as a preparatory step toward an upcoming general obligation debt or project finance transaction.

Fitch concludes in its criteria that management is now more important to predicting favorable credit performance than appreciated in the past. 'As a key to ratings in the 21st century, the role of management and new insights in the analysis of local economies and sources of repayment, collateral pledged, or structural enhancements, form the cornerstone to Fitch's revised rating guidelines for subnational debt,' according to Gersan Zurita, senior director at Fitch. 'For issuers in Latin America, in particular, but also throughout the emerging markets, Fitch believes that, in the age of the internet, complete updates of financial disclosure widely accessible to investors in both English and the native language, will differentiate winning borrowers in the international capital markets,' said Zurita.

For a copy of the report, please visit Fitch's web site 'www.fitchratings.com.' The report can be found by clicking to the 'Sovereigns & Subnationals \ Subnationals' sector and then linking to the 'Criteria Reports' page. A copy of the report can also be obtained by contacting the Ratings Desk at 800/893-4824.