Moody’s upgrades Ireland’s status
Moody’s was the only one of the three major credit ratings agencies to have Ireland at sub-investment grade.
Last night it upgraded the sovereign rating to Baa3/P-3 from Ba1/NP. The outlook on the ratings is now positive.
It said the two main drivers for the upgrade were firstly the growth potential of the Irish economy, which together with ongoing fiscal consolidation, is expected to bring government debt ratios down from their recent peak; and secondly the Irish Government’s exit from its EU/IMF support programme on schedule, with improved solvency and restored market access.
“In a related rating action, Moody’s also upgraded the debt ratings of Ireland’s National Asset Management Agency (Nama), whose debt is fully and unconditionally guaranteed by the Irish Government, to Baa3/P-3 from Ba1/NP. The outlook on Nama’s rating is also positive. In addition, Moody’s has assigned its Baa3 rating to the recent 2024 benchmark bond issue that the Government sold earlier in January.”
Many of the big pension and investment funds were prevented from investing in Irish Government debt because it had a junk status.
The move is expected to lead to a further reduction in the country’s interest rate.
Minister for Finance Michael Noonan welcomed the move: “The decision by Moody’s to upgrade Ireland’s credit rating reflects the significant progress that has been made in stabilising the public finances, restructuring the banking sector and, most importantly, growing the economy and creating jobs.
“Ireland is now rated at investment grade by all of the major credit rating agencies, highlighting the major improvement in investor sentiment towards Ireland,” he said.
“The change in the outlook accompanying Ireland’s rating from stable to positive reflects Moody’s expectation of a sustained recovery in the Irish economy and improved debt dynamics,” Mr Noonan added.
