The credit ratings agency Moody’s has downgraded Ireland‘s long-term debt to junk status from Baa3 to Ba1 – the highest junk grade.
The Wall Street Journal reports that Moody’s kept Ireland’s credit outlook negative, saying the country would probably need more financing before it can return to the private market. In a release, Moody’s said:
“The key driver for today’s rating action is the growing possibility that following the end of the current EU/IMF support program at year-end 2013 Ireland is likely to need further rounds of official financing before it can return to the private market, and the increasing possibility that private sector creditor participation will be required as a precondition for such additional support, in line with recent EU government proposals.”
The National Treasury Management Agency (NTMA) noted the decision by Moody’s tonight, saying that decision was “primarily driven by their concern about the prospect of private investor participation in future financial support programmes in the euro area,” but that Moody’s had acknowledged that Ireland had “demonstrated a strong commitment to fiscal consolidation and is successfully delivering on its objectives as required under the EU/IMF Programme of Support.”
Source and full story: The Journal, 12 July 2011
