Ireland's Last Top-Rated Asset Bonds Placed on Negative Review by Moody's

Moody’s Investors Service placed the last Irish asset-backed bonds that still have top ratings on review for possible downgrade, saying that triple-A gradings are no longer achievable for most securitizations in the country.

Moody’s put the Aaa ratings of six Irish residential mortgage-backed bonds and one balance sheet collateralised loan obligation on review, it said in a report today. They included deals for Ulster Bank Ireland Ltd. and Irish Life & Permanent Group Holdings Plc.

“Corporate performance will deteriorate further in the context of increasing uncertainty to Ireland’s economic outlook,” Moody’s analysts including Annick Poulain in Paris wrote in the report. “Moody’s no longer views Aaa ratings as achievable for Irish structured finance deals except, for example, those with very short remaining maturities.”

Ireland is effectively capping the ratings of Irish asset- backed securities at a time when the European Central Bank is starting to only accept higher-graded portions as collateral for loans. The nation was bailed out with an 85 billion-euro ($112 billion) international loan package this week after the collapse of a real-estate bubble sparked a surge in banks’ bad loans.

Moody’s cut Ireland’s top sovereign rating in July 2009 and the nation is now graded two levels lower at Aa2 and on review for downgrade.

Because of “the increase in the Irish Republic’s debt burden,” the New York-based firm’s ‘most likely scenario is a multi-notch downgrade” for the country, “leaving the rating in the investment-grade category,” Moody’s said.

To contact the reporter on this story: Esteban Duarte in Madrid at

To contact the editor responsible for this story: Paul Armstrong at

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