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(The following statement was released by the rating agency) HONG KONG/LONDON, June 30 (Fitch) Fitch Ratings has assigned New Zealand's forthcoming New Zealand Dollar-denominated bonds, due 2027, an expected rating of 'AA+(EXP)'. The expected rating is in line with New Zealand's Long-Term Local Currency Issuer Default Rating (IDR) of 'AA+' with Stable Outlook. The sovereign's Long-Term Foreign Currency IDR is 'AA' with Stable Outlook. KEY RATING DRIVERS New Zealand's IDRs reflect the following key rating drivers: - The Stable Outlook on the ratings balances the prospect of fiscal consolidation and stabilisation of public debt ratios against Fitch's expectation that already-high net external indebtedness will rise further over the forecast period, exacerbating a long-standing credit weakness. - New Zealand's economic policy framework, level of development, and standards of governance rank among the world's strongest from a credit perspective and warrant high-grade sovereign ratings. The sovereign has no history of debt default. RATING SENSITIVITIES The Stable Outlook reflects Fitch's assessment that upside and downside risks to the rating are currently well balanced. The main factors that, individually or collectively, might lead to positive rating action are: - Further progress in fiscal consolidation leading to the prospect of sustained reductions in public debt ratios - A rebalancing of the economy that puts New Zealand's net external debt (NXD) ratios on a sustainable downward path The main factors that, individually or collectively, might lead to negative rating action are: - A sharp and sustained rise in New Zealand's external borrowing costs that imposes a disruptive tightening on monetary and credit conditions sufficient to have a durable negative impact on growth, employment, public finances, and the health of the banking system - A negative shock to the real economy with similar lasting adverse effects, exceeding the typical cyclical volatility of the economy - A wider and/or longer-lasting current account deficit than Fitch currently projects, leading to higher NXD ratios relative to peers KEY ASSUMPTIONS The ratings and Outlooks are sensitive to a number of assumptions, including: - The global economy is assumed to perform broadly in line with projections set out in Fitch's June "Global Economic Outlook" - New Zealand's savings and productivity performance are assumed not to undergo a sharp structural change relative to historic behaviour over the forecast period to 2016. Contact: Primary Analyst Thomas Rookmaaker Director +852 2263 9891 Fitch Ratings (Hong Kong) Limited 2801, Tower Two, Lippo Centre 89 Queensway, Hong Kong Secondary Analyst Andrew Colquhoun Senior Director +852 2263 9938 Committee Chairperson Richard Fox Senior Director +44 20 3530 1444 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Leni Vu, Sydney, Tel: +61 2 8256 0326, Email: Leni.Vu@fitchratings.com. Additional information is available on www.fitchratings.com Applicable criteria, 'Sovereign Rating Criteria' dated 13 August 2012 and 'Country Ceilings' dated 09 August 2013, are available at www.fitchratings.com. Applicable Criteria and Related Research: Sovereign Rating Criteria http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=685737 Additional Disclosure Solicitation Status http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=837235 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.