Friday, May 16, 2014

16/5/2014: Summary of euro area 'peripherals' risk ratings

A neat summary of sovereign risk ratings by the majors and Euromoney Credit Risk:

Rankings on the left reflect country position in risk league tables per ECR (lower rank, better performance) and in the brackets give changes on ranks since 2013 (so, for example, Ireland improved its risk position by 5 places to 38th out of 186 countries covered by ECR). ECR score is a risk score (higher score, lower risk) and ECR tier is a tier of risk that groups of countries cluster into (lower tier, closer the tier to top performing lowest risk countries).

The lesson, probably, is:

  • Greece is due no upgrades
  • Cyprus is due no upgrades
  • Portugal is due an upgrade on Fitch to BBB+, Moody's to Baa2 or Baa3; and S&P to BBB
  • Italy is due no upgrades
  • Spain is due no upgrades
  • Ireland is due no upgrades post Baa3 upgraded to Baa1 (+positive outlook) by Moody's today
One way or the other, things are starting to move more positively on ECR scores side, but ratings agencies are still lagging. But that is not new - exactly the same lags took place on the downside of trade back in 2008-2012.

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