Noonan hopeful of rating upgrade

Finance Minister Michael Noonan

Finance Minister Michael Noonan says he hopes Moody’s Investors Service will raise the nation’s credit rating from non-investment grade as the country exits its bailout programme and plans debt sales.

“We’re hopeful that Moody’s will have another look at us early in the New Year,” he told Bloomberg Television. “The mood from all the rating agencies is positive at present.”

Ireland is preparing to exit the €67.5bn aid programme it entered in 2010 after its financial system almost collapsed. Government bonds, which slumped as the nation took a bailout, have returned 11.5% this year, amid signs the economic outlook is improving.

Moody’s, which gave Ireland its top AAA grade in 1998, cut its rating on the nation to non-investment grade, or junk, in Jul 2011.

“Moody’s difficulty seems to be with the EU and the eurozone, rather than with Ireland specifically,” said Mr Noonan. “That’s what they’ve told us.”

Junk rating cuts out some money managers, whose investment criteria stop them buying low-rated securities. Standard & Poor’s and Fitch Ratings, rank Ireland at BBB+, three levels above non-investment grade.

Mr Noonan said Ireland will exceed its budgetary targets this year and the Government has a cash buffer of more than €20bn.

“We’re in a good place,” he said in a speech after the interview. “We decided to exit the bailout and do it cleanly without any precautionary programs or any dedicated credit lines. We’re not jumping out of the plane without a parachute. We have cash buffers in excess of €20bn. That funds up to the second quarter of 2015 if we never entered the market.”

The Government injected €64bn into lenders including Anglo Irish Bank and AIB. This week, the State sold €1.3bn of preferred shares in Bank of Ireland to investors at a 4.75% premium. Mr Noonan said it was beyond expectations.

“A lot of people want to buy our paper. We’re not junk, we’re doing fine.”

There’s no evidence that the country’s lenders need more capital, he said. He’ll “take time and see” what to do with Ireland’s 99.9% stake in AIB, which is probably worth between €5bn and €7bn, he said.

He also said he’s still “hopeful” on the Government’s campaign to win retroactive recapitalisation of the banking system.


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