Surprise at Moody’s decision not to upgrade

Ratings agency Moody’s left its rating of government bonds unchanged in what amounted as a surprise to many commentators.

In leaving Ireland out of a list of upgraded countries last week, Moody’s went against conventional wisdom which said it was likely to upgrade sovereign bonds to A3 — one notch above the current rating.

Moody’s decision was the second time in a row it had overlooked Ireland despite its strong economic growth. Its last upgrade to the Irish sovereign came by way of a two-notch movement to Baa1 last May.

Goodbody Stockbrokers CEO, Dermot O’Leary, was among the analysts to have expressed optimism another upgrade was on the way: “May seems like a long time ago at this stage, with many developments, mainly positive, occurring since then. In relation to GDP, growth has accelerated much faster than expected at that point, while there was also an upward revision to the level of GDP that positively affected debt and deficit ratios... There is also little doubt that Ireland continues to shine in a European sense, particularly in relation to its superior growth performance.”