Edition 1450
18 November 2017
Edition: 1450

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DBRS considers raising Portugal's credit rating

by TPN/ Lusa, in News · 07-11-2017 07:15:00 · 0 Comments


Canadian ratings agency DBRS will "analyse in the next evaluation" of Portugal a potential improvement of the country's rating "if favourable developments continue," DBRS economist Adriana Alvarado said.

DBRS considers raising Portugal's credit rating

 

DBRS, the only leading international credit rating agency that rates Portugal's sovereign debt as better than junk, said on Friday that it was maintaining its BBB (low) rating, its lowest investment grade, and with a continued stable outlook.

 

Asked on Monday whether she would consider a review of the Portuguese rating next year after DBRS confirmed its BBB rating and stable outlook on Friday, Alvarado said "this is something that [DBRS] will review in the next evaluation."

 

The economist added that "Portugal has made important progress" and that "it can go in that direction if favourable developments continue," while noting that no decision had been made in this respect.

 

In a telephone interview with Lusa, the head of the Canadian agency's sovereign ratings department said, "if the improvement in public finances and economic growth is sustained and results in a downward trend in public debt, this may be good for the ' rating."

 

Additionally, to improve the rating assigned to Portugal, the agency also needs to see "more sustained progress in reducing bad debts."

According to the timetable for sovereign ratings decisions, DBRS will not comment on Portugal again this year and the calendar for 2018 is not yet available.

 

Last week's decision by Toronto-based DBRS means that Portuguese government debt continues to be eligible for the European Central Bank’s bond-purchase programme, which has helped keep a lid on bond yields.

 

It was widely expected, after Portugal's minority Socialist government submitted a draft state budget for 2017 to parliament that pledges it to meet previous commitments to reduce the public sector deficit as a proportion of gross domestic product.

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Edition 1450
18 November 2017
Edition: 1450

Read this week's issue online exactly as it appears in print.

Twitter