Moody’s downgrades Irish banks to junk status
Ratings agency Moody’s has downgraded its rating of Irish banks by two notches to junk status.
The downgrade comes just a week after Moody’s downgraded Ireland’s sovereign debt rating.
Today’s downgrade means Bank of Ireland is now rated Ba1 while AIB, EBS and Irish Life & Permanent are rated Ba2.
Moody’s said there is a high level of uncertainty about whether the Government would provide further support to the banking sector if required, beyond the €35 billion that has been agreed as part of the EU/International Monetary Fund package.
In a statement, Moody’s said: “As a result, Moody’s is no longer incorporating any systemic support in the unguaranteed senior unsecured debt ratings of the domestic Irish banks and these are now placed at the same level as the stand-alone ratings of the banks.”
The announcement resulted in a rise in Ireland’s borrowing costs and comes after the country recently passed its economic progress review.