Greece credit rating upgraded at Moody's, outlook revised to stable - Tomi Kilgore

Greece's sovereign bond rating was upgraded one notch to Caa2 from Caa3 at Moody's Investors Service, citing the release of a EUR8.5 billion tranche under the country's adjustment program allowing the repayment of debt, improved fiscal prospects and tentative signs of a stabilizing economy.

The outlook was revised to positive, which implies another upgrade is likely, from stable.

The sovereign bond rating isstill 8 notches below investment grade. The short-term debt rating was
affirmed at not prime.

"Beyond the near-term impact of allowing Greece to repay upcoming maturities, we consider the conclusion of the review to be a positive signal regarding the future path of the program, as it required the Greek government to legislate a number of important
reform measures,"

Moody's said in a research note. "The decision to assign a positive outlook to the Caa2 rating reflects Moody's view that the prospects for a successful conclusion of Greece's third adjustment program have improved, which in turn raises the likelihood of further debt relief."

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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

CANADA: Moody's downgrades 6 Canadian banks - consumer debt record-high 165 per cent disposable income

Moody's Investors Service has downgraded the long-term credit ratings of six Canadian banks, including Toronto-Dominion, Bank of Nova Scotia, Bank of Montreal and CIBC. National Bank and Desjardins were also downgraded.

The ratings agency lowered each of its ratings one notch, citing high levels of consumer debt and high home prices as threats to the Canadian economy. Moody's had put all six banks under review in October.

Canadian consumer debt has risen to a record-high 165 per cent of disposable income in the third quarter of 2012, up from 137 per cent in mid-2007. Bank of Canada governor Mark Carney has repeatedly warned about these levels, but they remain stubbornly high.

Finance Minister Jim Flaherty was quick to reiterate his confidence in Canada's banking system.
"For five years in a row, the World Economic Forum has ranked Canada's banking system as the soundest in the world," Flaherty said in a statement, adding that even after the downgrades, "Moody's rating of Canadian banks continues to be among the highest in the world."

Read more: Moody's downgrades 6 Canadian banks - Business - CBC News