• Says Iceland’s BAA3 rating outlook negative due to uncertainty over external liquidity
• Recovery threatened by delays in resolutions of Icesave dispute
• Icesave dispute is obstacle in resumption of official and private financial flows into Iceland
• Dispute has created risk Iceland government may not be able to refinance Dec 2011 and May 2012 eurobonds
• Iceland central bank can repay bonds but remaining funds may not be enough to keep investment grade rating