LONDON (Reuters) – The Republic of Serbia and its proposed London Club exchange bond were assigned «B+» long-term ratings by Standard & Poor’s yesterday, the first time the country has been rated by one of the major debt agencies. S&P also rated Serbia’s short-term sovereign rating at «B.» The outlook is stable. Serbia won a 61.9 percent write-down on its $2.6 billion debt to private creditors of the London Club in July this year, agreeing to settle the debt with a new 20-year $1.08 billion eurobond. The «B+» rating is a so-called speculative grade, several notches below the lowest of the coveted investment grades which allow countries to attract a wide range of investors if they issue debt. «The ratings on Serbia balance significant political risks and a vulnerable external position with expectations of continued prudent economic policies and further progress in structural reforms,» said Standard & Poor’s credit analyst Beatriz Merino. «Despite Serbia’s recent short-lived and weak coalition governments, progress with institutional and legal reforms, and toward macroeconomic stability, has been fairly steady,» she added. Political risks are Serbia’s key rating constraint, said S&P. Although recent governments have always been reform-oriented, infighting among coalition partners, largely reflecting personality-driven politics, has frequently undermined government stability.