Moody's upgrades Ireland's rating for second time in less than six months
Published 16/05/2014 | 22:13
Ireland's rating has been raised for the second time in less than six months by Moody's as the economy stabilises and concern that the euro-region may be under threat eases.
Moody's raised its Irish ranking to Baa1 from Baa3.
Moody's is upgrading its view as Irish employment grows, the government deficit narrows and the wider crisis which threatened the euro-region's future passes.
The ratings company restored Ireland's investment-grade rating in January and last week raised Portugal's rating.
Last week, Ireland's borrowing costs fell below the U.K.'s for the first time in more than five years even as the government grapples with sluggish consumer spending and delinquent mortgages.
Irish mortgage loans in arrears by more than three months rose to a record 18.4 percent in the first quarter, Fitch Ratings said this week.
"Some investors may scratch their head about valuations for Ireland," Rainer Guntermann and David Schnautz, analysts with Commerzbank AG, wrote in a note to clients this week, adding the economic backdrop was "mixed."
The yield on Ireland's 10-year benchmark government bond has fallen 87 basis points over the last 12 months to 2.64 percent. The spread, or difference, between German bonds of a similar maturity has also fallen 87 basis points to 1.26 percent. Ireland sold €500million euros of treasury bills yesterday.