Spain and Greece See Ratings Upgrades

Both Spain and Greece have received ratings upgrades Friday. Fitch Ratings has upgraded Greece’s long-term foreign and local currency issuer default ratings (IDRs) to B from B-. The outlooks are stable. The issue ratings on Greece’s senior unsecured foreign and local currency bonds have also been upgraded to B from B-, while the country ceiling has been raised to BB from B+ and the short-term foreign currency IDR has been affirmed at B. A main driver for the upgrades has been the fact that Greece achieved a primary surplus in the general government account in 2013, a key target of the EU-IMF programme, and an over-performance relative to budget.

In a separate action, Standard & Poor’s Ratings Services (S&P) has raised its long- and short-term sovereign credit ratings on Spain to BBB/A-2 from BBB-/A-3. This is based on the fact that the ratings agency has revised its average 2014-2016 real GDP growth projections for Spain upward to 1.6% from 1.2%, reflecting the effects of labour and other structural reforms. The outlook is stable, reflecting the agency’s current view that risks to the ratings on Spain will remain balanced over the next two years.

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