Standard & Poor’s downgrades Irish government debt

RTE reports that Standard & Poor’s Ratings Services downgraded it’s long term sovereign credit rating for Ireland from ‘AAA’ to ‘AA+’. The downgrade had been well telegraphed and the percieved risk in Irish government debt long priced into the spread paid by the government on Irish treasuries over German government bonds. S&P warn that Ireland may be downgraded again if public finances deteriote further.

Bloomberg report that the cost of insuring Irish government debt rose 31 basis points, while the spread over German yields rose by 6 basis points on the news.

  • IRIA

    Considering S&P’s track record, it doesn’t mean much to me.

  • Mack

    After the sub-prime debacle, you’d hope it was meaningless. But not quite, many pensions funds / life policies / mutual funds will be limited by their prospectii to only purchasing AAA rated debt. Any of them holding Irish bonds will have had to sell today.