Moody’s slashes Anglo Irish ratings

first_img by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeMisterStoryWoman Files For Divorce After Seeing This Photo – Can You See Why?MisterStoryTotal PastThe Ingenious Reason There Are No Mosquitoes At Disney WorldTotal PastNoteabley25 Funny Notes Written By StrangersNoteableyMoneyPailShe Was A Star, Now She Works In ScottsdaleMoneyPailSerendipity TimesInside Coco Chanel’s Eerily Abandoned Mansion Frozen In TimeSerendipity TimesBrake For ItThe Most Worthless Cars Ever MadeBrake For ItBetterBe20 Stunning Female AthletesBetterBemoneycougar.comThis Proves The Osmonds Weren’t So Innocentmoneycougar.comautooverload.comDeclassified Vietnam War Photos The Public Wasn’t Meant To Credit agency Moody’s slashed its ratings on Anglo Irish Bank’s lower-grade debt, rattling investors as Dublin tots up the final cost of rescuing a lender whose soured loans have crippled the country’s economy.Moody’s cut the nationalised bank’s senior unsecured debt by three notches to Baa3 – just one notch above junk status – citing a small risk the government would not continue to support that class of debt, the agency said. It slashed Anglo Irish’s subordinated debt by six notches to Caa1.The steadily mounting scale of the bank’s rescue has heaped further pressure on already strained public finances, propelling the former “Celtic Tiger” economy to the forefront of investor concerns about the sustainability of sovereign debt in the euro zone.According to unnamed government sources cited by German business daily Handelsblatt on Monday, the European Central Bank gave serious consideration to activating the euro zone’s bailout fund for Ireland but in the end decided not to.Finance Minister Brian Lenihan has said it was unthinkable that Ireland would default on senior debt but, in the absence of such assurances given on subordinated paper, analysts say those might face a buyback at well below par.The euro fell to an intraday low against the dollar following the Moody’s announcement. Already high yield spreads on Irish debt compared with German equivalents were little changed.The rating agency said that while it still expected the government to support all grades of senior debt, the rating would remain under review for possible downgrade until a decision was made.“While Moody’s considers the likelihood of the government not supporting this (senior unsecured) debt to be very small, this risk has been reflected in the three-notch downgrade,” Ross Abercromby, lead analyst for Anglo Irish at Moody’s, said in a statement.Facing political pressure to shut down Anglo Irish, whose loan book soured dramatically after a disastrous property binge left it heavily exposed to the impact of the financial and market downturn, the government has outlined a compromise plan. It is splitting the lender into an asset recovery bank and another entity to house its deposits which will not lend any money.Though the final cost of the exercise is not expected to be revealed until later this week or early October, the 25bn euros so far earmarked would already push Ireland’s 2010 budget deficit to well over 20 per cent of gross domestic product.In a further hurdle to efforts to clean up public finances just two months before the 2011 budget vote, the main opposition party said it will pull much of the cover it provides for MPs absent from parliamentary votes. Moody’s slashes Anglo Irish ratings Share Show Comments ▼ John Dunne whatsapp Monday 27 September 2010 9:58 am whatsapp Tags: NULLlast_img

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