S&P downgrades Albania to B

Standard & Poor's said it lowered its long-term foreign- and local-currency sovereign credit ratings on the Republic of Albania to B from B+.

At the same time, the agency affirmed its short-term ratings at B.

The outlook is negative.

S&P said the action follows a significant unanticipated increase in the general government debt burden. The agency now expects this to reach nearly 67% of GDP in 2013 (or 66% of GDP on a net basis), where previously it projected general government debt at 58% of GDP at year's end, a large and unexpected deviation.

Important in this increase is the recent recognition of arrears worth an estimated 4% of GDP, S&P said.

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