- Oct 26, 2006
BUSINESS WORLD - Moody's to downgrade Irish ratingGlobal ratings agency, Moody's, today said it will likely downgrade Ireland by "several notches" in light of the EU / IMF bailout and the crystallisation of more bank and sovereign debt.
"Increases in the Irish Republic's debt burden being discussed exceed the expectation we had in October when we put Ireland's Aa2 rating on review for downgrade. A multi-notch downgrade, leaving the rating of the Republic still within the investment-grade category, is now the most likely outcome of our review of the sovereign credit," it said.
The note said that, apart from the crystallisation of additional bank contingent liabilities, the key considerations in its rating action will be the increased uncertainty regarding the economic outlook - particularly the effect of austerity measures on domestic demand - and the impact of elevated borrowing costs on Ireland's debt dynamics.
It will take us some time to recover in the end.