Noonan Says Moody’s Irish Junk Decision ‘Important, Not Vital’Joe Brennan and Dara Doyle
Irish Finance Minister Michael Noonan said that a decision by Moody’s Investors Service on whether to upgrade the nation’s junk credit ranking is important, though not vital.
Moody’s, the only ratings company not to rank Ireland as investment grade, is due to release its decision on Ireland today, possibly at about 9 p.m. in Dublin, according to Fiona Hayes, an analyst with Cantor Fitzgerald LP in Dublin.
“Moody’s is out of line but when we talk to Moody’s, their concern still seems to be with the euro zone as a whole, rather than Ireland in particular,” Noonan told reporters in Dublin today. “So, even if they don’t upgrade us, it’s not a reflection on the position of the Irish economy.”
Moody’s will raise its outlook on Ireland’s credit rating to positive from stable, while leaving the ranking at non-investment grade, according to nine of 10 analysts and economists surveyed by Bloomberg News. Concerns about the links between the state and banking system are overdone, according to Donal O’Mahony, global stategist at Davy, who expects the rating to be raised after the state last week sold 3.75 billion ($5.1 billion) of bonds.
It’s “reasonable to conclude that any residual concerns surrounding Ireland’s market access prospects were blown away by last week’s exceptional syndication,” O’Mahony said in an e-mail.
Ireland’s National Treasury Management Agency sold the bonds last week at a yield of 3.543 percent, the lowest price since at least 2000, the year after Ireland adopted the euro, according to data compiled by Bloomberg. The yield on the security has since fallen to 3.45 percent as of 11:00 a.m. in Dublin.
“We’re doing fine working on the ratings we have already from the main ratings agencies,” Noonan said.
Standard & Poor’s and Fitch Ratings didn’t reduce Ireland to junk during the debt crisis. They maintained Ireland at BBB+, the third-lowest investment grade, since April 2011 after successive cuts from AAA over the previous two years.
Moody’s cut its rating on the nation to non-investment