Moody’s Investors Service slashed Ireland’s credit rating by five notches to Baa1 from Aa2 today and warned further downgrades could follow if Ireland was unable to stabilise its debt.
Moody’s downgrade followed Fitch’s move last week to become the first ratings agency to strip Ireland of its A credit status, cutting it by three notches to BBB+ following the debt-stricken Government’s request for an EU-IMF bailout.
Taoiseach Brian Cowen described the cut in Ireland’s credit rating as “disappointing.”
S&P is the only ratings agency that still has Ireland in the top band but that may not last long as it has placed the A rating on review for a possible downgrade.
“Ireland’s sovereign creditworthiness has suffered from the repeated crystallisation of bank related contingent liabilities on the government’s balance sheet”, Dietmar Hornung, vice president and senior credit officer at Moody’s said.
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Dean Popplewell
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