Markets react positively to Irelands credit rating upgrade

first_imgMARKETS HAVE REACTED positively to Ireland’s crediting rating upgrade by Moody’s on Friday.The yield on 10-year bonds has fallen again, and is approaching levels close to what was seen before the financial collapse, currently lower than 3.45 per cent.The rating agency upgraded Ireland’s credit rating from junk bond status to investment grade with a positive outlook.Speaking to RTÉ’s Morning Ireland, Chief Executive of the National Treasury Management Agency (NTMA) John Corrigan welcomed the sharp reduction in yields, highlighting that each fall of 0.10 per cent represents a million in savings for the state.He noted that Ireland still has €4 billion to borrow to fund 2015, but is now open to a wider range of investors.“Some investors in the Middle East and Far East look for na investment grade rating from all of the three major ratings agency,” he said. The Moody’s rating brings us into the investment universe of a new constituency of investors.He said that the positive outlook puts ‘momentum’ behind the rating, and although hesitant to speculate as to when a future upgrade might occur, he said it is likely over the next 12 to 15 months if Ireland’s fiscal targets are reached.He added that “caution is the byword” when it comes to Ireland’s return to bond market, reiterating that while the post-bailout return earlier this month was significant, the government must borrow at a slow and regular rate.Read: Moody’s restores Ireland’s credit rating to investment grade >More: Ireland’s post-bailout return to the bond markets raised €3.75 bn >last_img

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