April 19, 2024

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Investment Grade: The Importance of Upgrading from Strict Moody's

Investment Grade: The Importance of Upgrading from Strict Moody's

To climb back to First category On a scale RatingsAs was the case before the outbreak of the financial crisis, the Greek goals were Government In order to attract prestigious investors, leaving the difficult days behind them forever. The first steps have been taken as Greece has now received the first level of investment recommendations from the International Monetary Fund Rating agencies, With the exception of the “strict” Moody's, One of the only “greats” that has not yet been given Investment grade For Greece.

after Double upgrade Last September, at the “Ba3” level, Moody’s kept the country one notch below investment grade, with a “stable” rating. in March 15The first evaluation is scheduled to take place in 2024, and expectations are increasing for an upgrade to investment grade, which will give more.”condition» In Greece's estimation, it will push it to leap forward.

►Read also: DBRS: Greece's BBB rating left unchanged (low)

Big bet

Moody's was the last institution to downgrade Greece's rating below investment grade in 2010, and was more or less expected to be the last institution to give Greece investment grade again. the Big bet Now the country must prove that it deserves a new promotion, within the investment grade.

For Greece to succeed, it must do so To climb grades “2+”. To enter First category of ratings by houses, with Moody's rating as a catalyst. In fact, Moody's is the largest in the world, hence the potential demand if you upgrade to it Greek bonds It can now even reach 18-20 billion euros.

It will also contribute to securing better terms for financing or refinancing debt, that is, issuing more long-term securities to repay short-term securities, that is, interest-bearing bonds.

Finance staff also reported that beyond the net benefits of lower debt servicing costs, any upgrade could help Greece achieve More attractive for inward foreign direct investment. If the upgrades are confirmed, it is possible that there will be An upward revision of Greek GDP.

Competent sources of financial staff clearly indicate that the next steps in any case within the investment level will be more complex. difficult The minimum investment level required Commitment to financial stability And for Path of reformsThis is what the government has been pursuing in recent years.

►Read also: Hatzidakis: Investment grade helps borrow cheaper – EIB’s contribution is important

Ratings

The following scheduled assessments are:

  • in April 19 Our home appraisal Standard & Poor's, Which “locked” the investment level for Greece through the upgrade that took place last October
  • in May 31 We will also have our first assessment of 2024 from home Fitchwhich raised Greece's level to investment grade last December

Although expectations are low, it is possible that there will be some surprise as our country is listed among the few countries that will see a decrease in its debt in 2024 in the Eurozone, as it will be one of the few European countries that will see a decrease in its debt in 2024. Good fiscal performance since then has succeeded in boosting primary surpluses.

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