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Moody's may leave Ireland disappointed

Thursday, January 16 14:40:46

Moody's Investors Service is due to review Ireland's credit rating tomorrow but analysts today forecast that the ratings company may leave our credit ranking at junk for now.

Moody's is expected by some to raise its outlook on Ireland's credit rating to positive from stable, when the ratings firm is scheduled to deliver its latest verdict tomorrow.

This is according to nine of ten analysts and economists surveyed by Bloomberg News.

They expect Moody's to put an upgrade of Ireland's investment ranking on hold until more details emerge about the health of the financial industry.

"The risk is that Moody's decides to wait until May to go for a full upgrade, when the banks will have reported their annual results and disclosed the results of a central bank assessment of their balance sheets," said Fiona Hayes, an analyst with Cantor Fitzgeraldn.

Moody's cut its rating on the nation to non-investment grade, or junk, in July 2011 after the collapse of the property market. Finance Minister Michael Noonan said last month he hoped the firm would raise the country from junk in early 2014 after exiting a three-year bailout programme in December.

The National Treasury Management Agency sold E3.75 billion of bonds last week at a yield of 3.543pc, the lowest price since at least 2000.

Standard and Poor's and Fitch Ratings did not reduce Ireland to junk during the debt crisis. They maintained Ireland at BBB+, the third-lowest investment grade, since April 2011 after successive cuts from AAA over the previous two years.