Showing posts with label Downgrade. Show all posts
Showing posts with label Downgrade. Show all posts
1/7/19
6/4/16
Finland: Moody's cuts Finland's last triple-A rating
Finland lost its last top-grade credit rating on
Friday as Moody's downgraded it to Aa1 with a stable outlook, citing
weak economic growth and its negative impact on the general government
debt ratio.
Once known for prudent fiscal policy and innovation, the Nordic country's economy has underperformed its euro zone peers in recent years for reasons including high labour costs, the decline of Nokia's former phone business and a recession in neighbouring Russia.
"The economy is showing some signs of positive momentum with a return to positive growth in 2015 following three years of recession. However, growth over the next five years will remain weak," Moody's said in its report.
Fitch downgraded Finland to Aa+ with a stable outlook in March, while Standard & Poor's cut its rating for the country to AA+ in 2014, later giving the rating a negative outlook.
Long proud of its top grade ratings, Finland took a hard line against euro zone bailouts during the currency bloc's debt crisis.
This year, the European Commision expects Finland's economy to expand by 0.7 percent, less than any other EU country except Greece.
Once known for prudent fiscal policy and innovation, the Nordic country's economy has underperformed its euro zone peers in recent years for reasons including high labour costs, the decline of Nokia's former phone business and a recession in neighbouring Russia.
"The economy is showing some signs of positive momentum with a return to positive growth in 2015 following three years of recession. However, growth over the next five years will remain weak," Moody's said in its report.
Fitch downgraded Finland to Aa+ with a stable outlook in March, while Standard & Poor's cut its rating for the country to AA+ in 2014, later giving the rating a negative outlook.
Long proud of its top grade ratings, Finland took a hard line against euro zone bailouts during the currency bloc's debt crisis.
This year, the European Commision expects Finland's economy to expand by 0.7 percent, less than any other EU country except Greece.
5/15/16
Polish Economy: Moody’s puts Poland on negative watch over political crisis - by Jan Cienski
Poland avoided a ratings downgrade from Moody’s
on Saturday, but the credit rating agency shifted its outlook from
stable to negative citing unpredictable economic policies and a
political standoff.
Poland is one of Europe’s fastest growing economies, but investor confidence has been shaken both by a host of expensive promises made by the right-wing Law and Justice party government, which won October’s election, and by a crisis over the country’s top constitutional court.
The country had feared a downgrade, which would have been the second after Standard & Poor’s in January.
Although Moody’s predicted the Polish economy would grow by 3.5 per cent this year and in 2017, the agency changed its outlook because of plans to increase spending and lower the retirement age.
It also warned about “unpredictable policies” like a promise to allow borrowers with mortgages denominated in Swiss francs to convert them to złotys, as well as a standoff over the Constitutional Tribunal.
“Though the implications of the constitutional changes for the independence of the Polish judiciary and therefore for the sovereign’s institutional strength remain unclear at this juncture, the crisis has the potential to impair investors’ perception of the rule of law and thereby their propensity to invest,” Moody’s said.
Read more: Poland: Moody’s puts Poland on negative watch over political crisis – POLITICO
Poland is one of Europe’s fastest growing economies, but investor confidence has been shaken both by a host of expensive promises made by the right-wing Law and Justice party government, which won October’s election, and by a crisis over the country’s top constitutional court.
Although Moody’s predicted the Polish economy would grow by 3.5 per cent this year and in 2017, the agency changed its outlook because of plans to increase spending and lower the retirement age.
It also warned about “unpredictable policies” like a promise to allow borrowers with mortgages denominated in Swiss francs to convert them to złotys, as well as a standoff over the Constitutional Tribunal.
“Though the implications of the constitutional changes for the independence of the Polish judiciary and therefore for the sovereign’s institutional strength remain unclear at this juncture, the crisis has the potential to impair investors’ perception of the rule of law and thereby their propensity to invest,” Moody’s said.
Read more: Poland: Moody’s puts Poland on negative watch over political crisis – POLITICO
2/23/13
Britain: Moody's Downgrades Britain: The Friday night drop - by Buttonwood
This Friday night drop was the old custom of PR men placing news stories in the grateful arms of Sunday newspaper financial editors. In return for an exclusive, they could usually guarantee a good press. Even the best PR man, however, would find it hard to spin Moody's decision to downgrade Britain from AAA to AA1, announced just before 10pm on a Friday night.
A lot of people thought the downgrade would happen at some point this year. Although the government had a bigger-than-expected surplus in January, it may well end up with a bigger deficit in 2012-13 than it did in 2011-12. The big spending cuts have yet to come. Austerity is planned not just for this Parliament but for the next. The economy is stuck in the doldrums, although at least unemployment has been falling. Moody's gives three reasons for the change.
A lot of people thought the downgrade would happen at some point this year. Although the government had a bigger-than-expected surplus in January, it may well end up with a bigger deficit in 2012-13 than it did in 2011-12. The big spending cuts have yet to come. Austerity is planned not just for this Parliament but for the next. The economy is stuck in the doldrums, although at least unemployment has been falling. Moody's gives three reasons for the change.
"1, The continuing weakness in the UK's medium-term growth outlook, with a period of sluggish growth which Moody's now expects will extend into the second half of the decade;Downgrading Britain: The Friday night drop | The Economist
2. The challenges that subdued medium-term growth prospects pose to the government's fiscal consolidation programme, which will now extend well into the next parliament;
3. And, as a consequence of the UK's high and rising debt burden, a deterioration in the shock-absorption capacity of the government's balance sheet, which is unlikely to reverse before 2016."
6/21/12
Canada: RBC, 14 other banks, downgraded by Moody's
Ratings agency Moody's Investor Service Thursday downgraded the credit ratings of Canada's biggest bank, the Royal Bank of Canada, and 14 other banks with global operations.
Moody's cut RBC's long-term deposit rating by two notches to Aa3, saying it faces a high probability of needing government support because of the exposure of its global investment banking operations to a possible financial crisis.
A downgrade usually means that it becomes more costly for banks to raise money by selling debt. Investors demand higher interest for riskier debt, which is what the downgrades represent.
Read more: RBC, 14 other banks, downgraded by Moody's - Business - CBC News
Moody's cut RBC's long-term deposit rating by two notches to Aa3, saying it faces a high probability of needing government support because of the exposure of its global investment banking operations to a possible financial crisis.
A downgrade usually means that it becomes more costly for banks to raise money by selling debt. Investors demand higher interest for riskier debt, which is what the downgrades represent.
Read more: RBC, 14 other banks, downgraded by Moody's - Business - CBC News
6/15/12
Moody's downgrades five Dutch banks
Moody's Investors Service has downgraded five Dutch banks, four of them by two notches, and warned a Greek exit of the euro would see further cuts.
The move kicks off a long-awaited round of downgrades for major European institutions.
Moody's set a stable outlook to the ratings for four of the groups but kept a negative outlook for ING Bank, meaning it could cut it again.
The downgrades will only add to pressure on European leaders to sort out the region's debt crisis, with a real test to the union coming this weekend as Greeks go to the polls. Moody's also warned that, were Greece to exit the euro, further ratings actions on European banks could well be needed.
The long-expected news had little immediate impact on financial markets in Asia, with the euro holding firm around $1.2616. "Today's actions reflect Moody's view that Dutch banks will face difficult operating conditions throughout 2012 and possibly beyond," Moody's said in a statement.
Moody's agency said it had cut the ratings by two notches to Aa2 for Rabobank Nederland, to A2 for ING and ABN Amro, and to Baa2 for LeasePlan Corporation.
EU-Digest
The move kicks off a long-awaited round of downgrades for major European institutions.
Moody's set a stable outlook to the ratings for four of the groups but kept a negative outlook for ING Bank, meaning it could cut it again.
The downgrades will only add to pressure on European leaders to sort out the region's debt crisis, with a real test to the union coming this weekend as Greeks go to the polls. Moody's also warned that, were Greece to exit the euro, further ratings actions on European banks could well be needed.
The long-expected news had little immediate impact on financial markets in Asia, with the euro holding firm around $1.2616. "Today's actions reflect Moody's view that Dutch banks will face difficult operating conditions throughout 2012 and possibly beyond," Moody's said in a statement.
Moody's agency said it had cut the ratings by two notches to Aa2 for Rabobank Nederland, to A2 for ING and ABN Amro, and to Baa2 for LeasePlan Corporation.
EU-Digest
1/13/12
French downgrade sends stocks slumping
Stock markets and the euro traded lower Friday as Greek debt swap talks were put on hold and France’s finance minister confirmed that Standard & Poor’s has downgraded the country’s credit rating.
Francois Baroin confirmed media reports that the rating has dropped one notch from the top triple-A level to AA+. Various reports said Germany and the Netherlands would keep their top ratings.
Earlier, representatives of private bondholders said crucial negotiations between the Greek government and its private creditors on a deal needed to avoid default had been "paused for reflection," which raised concerns the negotiations were close to collapse.
The talks are aimed at renegotiating the face value of bonds Greece has issued in order to reach an agreement on how much of a haircut the banks will take voluntarily. By making the deal voluntary, Greece would dodge a legal default, which risks triggering a much deeper financial crisis that could curtail European lending.
For more: French downgrade sends stocks slumping - Business - CBC News
Francois Baroin confirmed media reports that the rating has dropped one notch from the top triple-A level to AA+. Various reports said Germany and the Netherlands would keep their top ratings.
Earlier, representatives of private bondholders said crucial negotiations between the Greek government and its private creditors on a deal needed to avoid default had been "paused for reflection," which raised concerns the negotiations were close to collapse.
The talks are aimed at renegotiating the face value of bonds Greece has issued in order to reach an agreement on how much of a haircut the banks will take voluntarily. By making the deal voluntary, Greece would dodge a legal default, which risks triggering a much deeper financial crisis that could curtail European lending.
For more: French downgrade sends stocks slumping - Business - CBC News
9/22/11
Moody’s Bank Downgrades of Bank of America and Wells FargoAssailed as ‘Too-Big-to-Fail’ Persists - by Dakin Campbell and Donal Griffin
Moody’s cut the long-term credit ratings for Bank of America and Wells Fargo yesterday and said the government is “more likely now than during the financial crisis” to let a large U.S. bank collapse, according to a statement. The ratings firm said the two banks and Citigroup Inc., which had its short- term rating downgraded, benefitted more than others from underlying government support.
“They need to defend this move with logic, not just, ‘This is our methodology,’” said Nancy Bush, an analyst at SNL Financial, a bank-research firm in Charlottesville, Virginia. Moody’s likely is protecting itself “in case there is another downdraft, since they were caught absolutely flat-footed in 2008 by slapping AAA on everything,” she said.
9/20/11
Pressure grows on Greece, Italy hit by same credit downgrade as USA
Greek Finance Minister Evangelos Venizelos held a teleconference Monday with officials from the European Union, the International Monetary Fund (IMF), and the European Central Bank (ECB), to reassure international creditors providing the country with bailout funds.
The emergency call came a few hours after Venizelos announced plans for Greece to speed up reforms aimed at bringing its debt crisis under control, but the country's creditors (on the other end of the telephone call) wanted to talk things through to make sure Greece's plans are on track.
A decision on whether officials from the 'troika' (EU, IMF, and ECB) would need to pay a visit to Greece to sign off on Greece's belt-tightening efforts was put off until Tuesday evening, when the conference call would resume.
In the meantime, rating agency Standard and Poor's said it had downgraded Italy's sovereign debt rating by one notch, from A+ to A, a similar level as the US. with a negative outlook, which indicates further downgrades in the future.
For more : Home | Deutsche Welle
The emergency call came a few hours after Venizelos announced plans for Greece to speed up reforms aimed at bringing its debt crisis under control, but the country's creditors (on the other end of the telephone call) wanted to talk things through to make sure Greece's plans are on track.
A decision on whether officials from the 'troika' (EU, IMF, and ECB) would need to pay a visit to Greece to sign off on Greece's belt-tightening efforts was put off until Tuesday evening, when the conference call would resume.
In the meantime, rating agency Standard and Poor's said it had downgraded Italy's sovereign debt rating by one notch, from A+ to A, a similar level as the US. with a negative outlook, which indicates further downgrades in the future.
For more : Home | Deutsche Welle
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