Markets shrug off Moody's downgrades
RATINGS downgrades and the deepening crisis in Athens were not enough to hamper Spain, Italy and even Greece all borrowing in the markets yesterday.
Italy raised €6bn, Spain borrowed €5.446bn and Greece took in €1.3bn from investors in the markets, just hours after Moody's cut its debt ratings for six eurozone countries.
Moody's cut Spain's credit rating two notches to A3. Italy, Malta, Portugal, Slovakia and Slovenia were each hit with a one notch downgrade and the outlook for France, Austria and the UK was changed to negative. Moody's blamed the euro crisis for the downgrades,
"The uncertainty over the euro area's prospects for institutional reform of its fiscal and economic framework and the resources that will be made available to deal with the crisis, are among the main drivers of Moody's action," Moody's said.
Despite being in the grip of the crisis Ireland escaped the latest round of ratings downgrades. It's the second time in row for the government here, after rival agency Standard & Poors also left the Irish rating untouched when it cut ratings for nine eurozone borrowers last month.
That was good news for Irish officials currently in Asia to drum up interest in a hoped-for sale of Irish government bonds later in the year.
Italian borrowing costs fell at a successful sale of €6bn of long term debt, part of the €450bn of debt the country needs to borrow in the markets this year.
Spain's 10-year borrowing costs did rise, but not by much, and the country was able to get away a €5.466bn sale of short term loans.
More of a surprise was a successful sale of Greek two-year debt. That sale was done in the teeth of bleak headlines and after the official statistics agency in Athens said the Greek economy had contracted seven percent in the fourth quarter.