Moody’s Cuts Ireland’s Credit Rating (MCO)

Moody’s Investors Service MCO downgraded Ireland's credit rating one notch, to Aa2 from Aa1, citing a weak banking system and rising debt according to a report from the New York Times. Even with the downgrade, Ireland still remains comfortably above junk level. Moody’s also changed the outlook on the ratings to stable from negative. Yields on the benchmark 10-year Irish bond rose 9 basis points as a result of the credit downgrade. Ireland is set to sell up to 1.5 billion euros of bonds maturing in 2016 and 2020 on Tuesday. “Today’s downgrade is primarily driven by the Irish government’s gradual but significant loss of financial strength, as reflected by its deteriorating debt affordability,” said Dietmar Hornung, senior credit officer at Moody’s.