Irish credit rating slashed by S&P

RATING agency Standard & Poor has slashed Ireland's credit rating down to A-/A-2.

However, the group is upbeat regarding the future outlook for the Irish economy and expects that the next government should broadly meet or surpass the 2014 general government primary surplus target of 1.9pc of GDP.

The agency outlined that it would maintain its negative outlook on the country due to ongoing concerns about bank funding.

S&P said that it did not "see major risks to Ireland's meeting the IMF targets because we see a broad political consensus behind the goal of stabilising the economy, the banks, and public finances, even if the path to such targets may be amended by successive governments."

UNSECURED

The lower rating chimed with "our view of the uncertainties surrounding the size of Ireland's additional capital needs for its largely state-owned financial sector".

But the agency said that the Government may be less willing to protect senior unsecured bondholders in the Irish banks.

It said that while there is still a "fairly small prospect of senior secured unguaranteed bonds in rated institutions being forced into a coercive default", there is "increased political acceptance for burden sharing with respect to senior unsecured unguaranteed bonds".