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November 19, 2019

S&P raised outlook for Greece credit rating

Greece credit ratingInternational agency S&P Global Ratings raised the outlook for Greece credit rating from stable to positive. The publication recalls that Athens is preparing to return to the capital markets after a 3-year pause. The agency reaffirms the sovereign debt rating, citing the country’s economic growth backed by fiscal reforms and a future debt cut that will allow Athens to reduce the debt to GDP ratio by 2020.

S&P points out that the change in the outlook reflects the expectation of lowering debt service costs, promised fiscal reforms by 2020, and creditors commitments, especially in the Eurogroup, to improve the sustainability of the debt burden.

A month ago Moody`s raised Greece’s credit rating by one step to Caa2 with a positive outlook. This move supported the trading of Greek government securities on the capital markets.

The expectations are that Greece will come out on the capital markets for the first time since 2014 with five-year bonds. At this stage, however, there is still no clarity when this will happen.

But Greece is ploughing head with its bond market return, looking to refinance an existing five-year bond at a lower interest rate. In a statement to the stock exchange on Monday, Greeceā€™s debt office said it would ask holders of its 2019 bonds issued three years ago to exchange their debt for cash.

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