Ratings agency Moody’s has upgraded Ireland’s sovereign credit rating.
The move to the Aa3 ratings brings Ireland back to Moody’s AA category for the first time since 2010.
It is the second time that Moodys has upgraded Ireland in under one year.
In May of last year, it bumped the country’s credit rating up to A1.
It means all major ratings agencies now have Ireland in their AA category, a development which should help keep Ireland’s cost of borrowing down and attract investors.
The agency also gave Ireland a stable outlook and maintained its short-term rating at the highest level of P-1.
“This upgrade is a positive development,” said Dave McEvoy, Director of Funding and Debt Management at the National Treasury Management Agency.
“It reflects the ongoing strength and resilience of the Irish economy as well as the significant improvements in the public finances, as evidenced by fiscal surpluses and improving debt metrics.
“It is also consistent with the recent performance of Irish government bonds, relative to our peers, which confirms Ireland’s place amongst semi-core European sovereign issuers.”
Making the change, Moody’s referenced the significant improvement in Ireland’s key fiscal and debt metrics and its expectation that this improvement will prove resilient to potential shocks.
It also said that it expects Ireland’s economy to continue to grow at a solid pace, albeit slowing from the exceptional rates of growth in 2021 and 2022.
It said Ireland’s fiscal metrics will continue to improve and remain robust in its baseline scenario and remain robust in a downside of markedly weaker corporate revenue, as spending growth has remained contained despite the rapid growth of corporate tax receipts during 2021 and 2022.
Moody’s also said an established track record of prudent bank lending practices and banking regulation and supervision also diminish the sovereign credit impact of potential property shocks.
“The stable outlook also reflects Moody’s expectation that risks to Ireland’s credit profile from domestic, geopolitical and banking sector sources will be contained over the near to medium term,” it said.
The agency has also upgraded the National Asset Management Agency’s backed long-term issuer ratings to Aa3 from A1.
“Moody’s considers that the willingness of the Irish government to back NAMA’s obligations is no lower than its commitment to service its own sovereign bonds,” it said.
“The outlook on NAMA has also been changed to stable from positive.”
Article Source – Moody’s upgrades Ireland’s credit rating to highest level in 13 years – RTE.ie