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S and P restores 'A' rating for Ireland

Friday, June 06 17:06:41

Global ratings agency, Standard and Poor's, has become the first to restore Ireland's rating to an A grade.

It said it upgraded Ireland's government bonds by one notch to A-minus, saying the country is making good progress in getting a grip on its six-year banking debt crisis.

It marks the first major upgrade of Ireland by S and P after it downgraded the country at the height of the economic ills, in 2011. As the worst of the crisis eased, it subsequently lifted its Ireland outlook to positive. And Friday, S and P said it increased its rating to A-minus from BBB+, as a brighter economic outlook has improved Ireland's fiscal position and the country's damaged banks have shown signs of being on the road back to financial health.

It said its outlook remains positive.

Analysts say the upgrade could be more significant than the one notch may suggest and may help further deepen the market for the country's bonds because some types of investors won't buy debt with less than an 'A' rating.

Ireland was plunged into crisis when the collapse of an overbloated property market wrecked its banks and brought the country close to bankruptcy. However, it exited its 2010 bailout with the European Union and International Monetary Fund in December and successfully deepened its access to bond markets. Irish government bond now trade close to historically low yields.

The National Treasury Management Agency welcomed today's upgrade of Ireland's sovereign credit rating.

NTMA Chief Executive John Corrigan said: "Today's decision by S and P marks the first A rating of Ireland by any of the major credit rating agencies since the normalisation of Ireland's return to the bond markets. It represents a further confirmation of the continuing positive assessment of Ireland by the major credit rating agencies. It also underpins the already strong investor sentiment towards Ireland and provides a very supportive backdrop for the remainder of the NTMA's funding programme in 2014. It is gratifying to note that the bond market access achieved by Ireland and the progress made by NAMA are among the positive factors cited by S and P."