Moody’s Cut Spain’s Last AAA Rating ; Ireland Bank Rescue Price Tag At USD 68 Billion
Moody’s lowered Spain to Aa1 from Aaa with a stable outlook. This was widely expected, Spain bond spreads narrowed. Bloomberg story: Spain’s Credit Rating Cut One Level to Aa1 by Moody’s.
Ireland bank rescue price tag was estimated at USD 68 billion or 32% of Ireland’s GDP. Bloomberg story: Ireland Faces $68 Billion Bank Rescue to Prop Up Allied, Anglo.
For Anglo Irish the additional funds needed estimate is at the low end of my yesterdays guess – at USD 11.4 billon ( USD 6.4 billion base case + USD 6.4 billion unexpected losses).
Spreads eased a bit as numbers seem realistic.
Ireland debt burden doesn’t seem manageable, but that is a theme for the future….