London, 01 August 2014

Moody’s Investors Service has today upgraded Greece’s government bond rating by two notches to Caa1 from Caa3. The outlook on the rating is stable. Greece’s short-term debt rating is unaffected and remains Not Prime (NP).

The rating action was triggered by the following key factors:

  • The significant improvement in Greece’s fiscal position over the past year and the rating agency’s view that the government remains committed to fiscal consolidation underpin Moody’s forecast of a gradual decline in the public debt to GDP ratio, which Moody’s expects to peak this year and then start to fall from 2015.
  • The improvement in Greece’s economic outlook, based on both a cyclical recovery and the progress made in implementing structural reforms and rebalancing the economy, further supports the downward trajectory of the public debt ratio.
  • The government’s reduced interest burden and lengthened maturities of the debt, which is predominantly owed to official creditors, adds to fiscal flexibility and reduces refinancing risks.

Concurrently, Moody’s has raised the local and foreign-currency country ceilings for long-term debt and deposits to Ba3 from B3. The foreign-currency country ceilings for short-term debt and deposits remains Not Prime (NP).

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S&P: Argentina Foreign Currency Ratings Lowered To ‘SD’ After Holders Of Discount Bonds Did Not Receive Interest Payment

  • On June 30, 2014, the Republic of Argentina failed to make a US$539 million interest payment on its discount bonds maturing in December 2033 (Discount Bonds). Standard & Poor’s does not rate the Discount Bonds. The Discount Bonds provide for a 30-day grace period for payment.
  • On July 30, the grace period expired with bondholders not receiving their payment.
  • We are therefore lowering our long- and short-term foreign currency sovereign credit ratings on Argentina to selective default (‘SD’) from ‘CCC-/C’, indicating that Argentina defaulted on some of its foreign currency obligations. At the same time, we are removing the ‘CCC-/C’ foreign currency ratings from CreditWatch, where they were placed with negative implications on July 1, 2014.
  • If and when Argentina cures the payment default on the Discount Bonds, we could revise our ratings on Argentina depending on our assessment at that time of Argentina’s residual litigation risk, its access to international debt markets, and its overall credit profile.

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OVERVIEW

  • We have revised our 2014-2016 average real GDP growth projections for Ireland upward to 2.7% from 2.0%.
  • This reflects our expectation of a continued strong external performance and a sustained recovery of the domestic economy.
  • We are therefore raising our long-term sovereign credit ratings on Ireland to ‘A-‘ from ‘BBB+’. We are affirming the short-term ratings at ‘A-2′.
  • The outlook is positive, reflecting our view of at least a one-in-three possibility that we could raise our ratings on Ireland again in the next two years.

RATING ACTION

On June 6, 2014, Standard & Poor’s Ratings Services raised its long-term foreign and local currency sovereign credit ratings on the Republic of Ireland to ‘A-‘ from ‘BBB+’. At the same time, we affirmed the short-term ratings at ‘A-2′. The outlook is positive.

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OVERVIEW

  • We are affirming our ‘BBB/A-2′ long- and short-term sovereign credit ratings on the Republic of Italy.
  • The affirmation reflects our view of Italy’s wealthy and diversified economy, as well as our expectation that the government will make some progress on important structural and fiscal reforms.
  • The outlook on the long-term rating remains negative, reflecting our view of risks to the public sector balance sheet from weak real and nominal growth prospects.

RATING ACTION

On June 6, 2014, Standard & Poor’s Ratings Services affirmed its unsolicited ‘BBB’ long-term and ‘A-2′ short-term sovereign credit ratings on the Republic of Italy. The outlook on the long-term rating remains negative.

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