Foreign currency denominated bonds are sometimes problematic for Emerging Markets as they must "get" dollars in order to pay coupon and principal.
LONDON (Standard & Poor's) Feb. 4, 2010--Standard & Poor's Ratings Services
said today that it expects to rate the proposed global U.S. dollar bond to be
issued later today by the Republic of Lithuania (BBB/Stable/A-3). The rating
would likely track the sovereign rating.
The sovereign ratings on Lithuania reflect clear commitment across all
political parties to support and implement budgetary and structural policies
which anchor the currency board regime and enhance the economy's flexible
labor and goods markets. An "internal devaluation" is currently taking place,
as unit labor costs have declined sharply since the end of 2008, improving
competitiveness in the tradeables sectors. While the resulting unemployment
and deflation of nominal income are weighing on tax collection, the process
should ultimately result in a stabilization of national income as net exports