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Moodys warns of further downgrade of Ireland's credit rating

Yes, more good news on the back of that bailout: ratings agency Moody’s says bailout could be “credit negative” for Ireland.

RATINGS AGENCY MOODY’S has warned that Ireland’s bailout could turn out to be a credit negative move, according to the New York Times.

The organisation said its current review of Ireland’s rating could see a “multi-notch downgrade” as a result of the country’s increased sovereign debt burden.

Moody’s currently ranks Ireland as a Aa2 credit rating, but put that rating on negative outlook last month.

It cited the cost of bailing out the banks, rising borrowing costs and weak economic growth as factors which could contribute to a likely downgrade. However, it seems now that the downgrade will be greater than had been anticipated.

A national downgrade would also affect the credit quality of Irish banks.

Standard & Poor’s rates Ireland as a Aa- rating, one notch below that of the current Moody’s rating.

Fitch cut its credit rating for Ireland from AA- to A+ last month, citing the “greater-than-expected fiscal cost associated with the government’s recapitalisation of the Irish banks, especially Anglo Irish Bank”.

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