Noonan hopes bailout exit will trigger Moody’s upgrade

Minister for Finance Michael Noonan said he hopes Moody's rating agency will raise the Ireland's credit rating from non-investment grade as the country exits its bailout program and plans debt sales.

"We're hopeful that Moody's will have another look at us early in the New Year," Mr Noonan said in an interview with Bloomberg Television in London.

“The mood from all the rating agencies is positive at present.”

Moody's, which gave Ireland its top Aaa grade in 1998 before the euro was introduced, cut its rating on the nation to non-investment grade, or junk, in July 2011 following the financial collapse.

"Moody's difficulty seems to be with the European Union and the euro zone, rather than with Ireland specifically," Mr Noonan said. "That's what they've told us."

A junk rating cuts out some money managers, whose investment criteria stop them buying low-rated securities. Standard and Poor's and Fitch Ratings, rank Ireland at BBB+, three levels above non-investment grade.

The yield on Ireland’s 10-year bonds was little changed at 3.56 per cent today, leaving the yield difference, or spread, over similar-maturity German bunds at 1.70 percentage points.

“We decided to exit the bailout and do it cleanly without any precautionary programs or any dedicated credit lines. We’re not jumping out of the plane without a parachute. We have cash buffers in excess of €20 billion. That funds up to the second quarter of 2015 if we never entered the market.”

The sale of €1.3 billion worth of Bank of Ireland preference shares by the Government earlier this weem was beyond his expectactions, he said.

“A lot of people want to buy our paper. We’re not junk, we’re doing fine,” he said.

He also said there is no evidence that the country’s lenders need more capital.

Mr Noonan indicated he’ll “take time and see” what to do with the State’s 99.9 per cent stake in Allied Irish Bank, which is probably worth between €5 billion and €7 billion.

He said he was still “hopeful” on the Government’s campaign to win retroactive recapitalisation of the banking system.

Bloomberg