IRELAND: Moody’s Changes Outlook on Ireland’s Sovereign Rating to Positive, Affirms Baa1 Rating

Tuesday September 15 2015

Moody`s Investors Service (Moody’s) has announced it has changed the outlook on Ireland`s long-term government bond ratings to positive from stable and affirmed the Baa1/Prime-2 long-term and short-term government bond ratings.

Moody`s decision to assign a positive outlook to Ireland`s Baa1 rating reflects the marked improvement in the country`s credit fundamentals over the past year, including a stronger economic recovery, faster fiscal consolidation and a substantial decline in the government`s debt burden.

However, Moody`s notes that, despite this positive trend, Ireland`s public debt ratio remains at around 100% of GDP (year-end 2015), which is significantly higher than most single-A rated peers. An upgrade into the A rating category depends crucially on a continuation of prudent fiscal policies and a sustained further reduction in the public debt ratio.

Concurrent with the rating action on the sovereign, Moody`s has also changed the outlook on the bond ratings of the National Asset Management Agency (NAMA) to positive from stable and affirmed its Baa1/P-2 ratings. NAMA`s debt obligations are explicitly guaranteed by the Republic of Ireland.

Ireland`s local and foreign currency deposit ceilings and the local and foreign currency bond ceilings are unaffected by this rating action and remain at Aa1/P-1.

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