Care of the FT:
"Frankfurt, July 19, 2010 — Moody’s Investors Service has today downgraded Ireland’s government bond ratings to Aa2 from Aa1. The main drivers for the downgrade are:
1. The government’s gradual but significant loss of financial strength, as reflected by the substantial increase in the debt-to-GDP ratio and weakening debt affordability (as represented by interest payment to government revenue).
2. Ireland’s weakened growth prospects as a result of the severe downturn in the financial services and real estate sectors and an ongoing contraction in private sector credit.
3. The crystallization of contingent liabilities from the banking system, as represented by a series of recapitalization measures and the need to create the National Asset Management Agency (NAMA), a government-created special purpose vehicle that is acquiring impaired loans from banks.
Moody’s has changed the outlook on the ratings of the government of Ireland to stable from negative as the rating agency now views the upside and downside risks as being evenly balanced at the current rating level. Moody’s has also affirmed Ireland’s short-term issuer rating of Prime-1 with a stable outlook. Ireland falls under the Eurozone’s Aaa regional ceilings for bonds and bank deposits, which are unaffected by the Irish government’s downgrade.
Moody’s has also downgraded to Aa2/stable outlook from Aa1/negative outlook the rating of Ireland’s National Asset Management Agency (NAMA), whose debt is fully and unconditionally guaranteed by the government of Ireland."
