Ireland's Credit Rating Downgraded To Junk By Moody's

NEW YORK (Walter Brandimarte and Daniel Bases) - Moody's Investors Service on Tuesday cut Ireland's credit rating to junk status, saying the country will likely need further official financing before it can return to international capital markets.

Chances that European policy makers will force the private sector to share the burden of future bailouts also weighed on Moody's decision, as the agency believes that decision would drive borrowing costs higher for weaker euro zone members.

"The prospect of any form of private sector participation in debt relief is negative for holders of distressed sovereign debt. This is a key factor in Moody's ongoing assessment of debt-burdened euro area sovereigns," the ratings agency said in a statement.

Moody's cut Ireland's ratings by one notch to Ba1 from Baa3 and kept a negative outlook on the rating, which means further downgrades are likely in the next 12 to 18 months.

(Editing by James Dalgleish)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[GarbageMenPT]

07:44 PM on 07/12/2011

Moody's Got Junk Mail from Portugal

On July 5th, 2011, Moody's rated Portugal as "JUNK".

As a result, Pedro & Hugo, a couple of creatives, took some time off from their jobs at BBDO to send a letter to Moody's headquarters in New York. A lettter with a piece of Portugal the way Moody's sees it.

Just to let them know we're working to improve our rating.

You can watch it here: http://www.youtube.com/watch?v=OzLJzYlpGqs

[Sandman911]

06:02 PM on 07/12/2011

Wow !!! Looks like Ireland is enjoying the benefits of Cap & Trade and the green job industry !! How long have they had Cap & Trade now ? Six years ? Wonder what Al gore has to say about their prosperity ?

[Viper]

05:59 PM on 07/12/2011

Recall just about 5-6 years ago Repugs held up Ireland as a model of their ideas, with massive tax cuts, an 11% corp tax and dereguation... and a one time Bubble like here...

Now when you mention Ireland.. all you hear is crickets from Repugs...

Remember if our southern and RED states did not get back 50% more than they pay in taxes as welfare for the past 50 years, they would be in worse shape than all the weak Euro Countries. Overall the EU company is now stonger than us, with lower unemployment, rising wages and a trade surplus. They dont have an education problem or infrastructure problem (ours is over 3 trillion)... they just bought 1/3 of our worthless debt.

Regards

[StarDagger]

05:53 PM on 07/12/2011

I wonder if people realize that all these Euro economies are doing BETTER than the US.

[MrTown3]

05:41 PM on 07/12/2011

and up next we have Ireland...

[ThePeacemakers]

05:28 PM on 07/12/2011

Don't let it bother you, Ireland.

These are the same people who rated absolute CRAP as AAA before the big crash.

[luvsox]

05:28 PM on 07/12/2011

How could this be? They followed the conservative's recipe for success to a T.

[Sandman911]

06:10 PM on 07/12/2011

Serious ??? They implemented Cap & Trade 6 years ago to transition into Green Jobs. It DEVESTATED their economy AND job market. LOLOLOL !!!