Tuesday 20 February 2018

Thomas Molloy: Rescue from the 'scrapheap' on horizon as investors warm to us

Thomas Molloy

Thomas Molloy

ESB workers are threatening to plunge the country into darkness and there are increasing doubts about how hospitals are funded, but the big picture seems to be that outside investors are warming to Ireland once again.

Credit rating agencies may have lost some of their sheen since the financial crisis revealed worrying conflicts of interests. But having said that, there is no doubt that an upgrade is unambiguously good news. No country likes to be labelled as "junk" and the word has long hovered in the background even if the other two major rating agencies no longer rate Irish bonds like this.

There could be practical benefits too if Moody's and the others use the upgrade of sovereign bonds to begin upgrading Irish bank bonds. This could make it cheaper for Irish banks to borrow in future and reduce the cost of loans for business.

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