Ireland years away from A rating: Fitch
Fitch said it would take several years before crisis-hit Ireland would be back in 'A' credit status, after the ratings agency became the first among its peers to strip Dublin of its 'A' rating to BBB+.
Asked whether it would take a long time before Ireland was back in 'A' territory, Chris Pryce, Fitch's primary analyst for Ireland, said in an interview with Reuters Insider on Friday:
Yes, several years I would have thought.
Pryce also said there was a risk Ireland would be forced to restructure its debt but that was not, in his view, the most likely scenario.
We do not assume that Ireland is inevitably going to restructure. Clearly there is a possibility, but it's not our leading assumption by any means, he said.
Fitch downgraded Ireland by three notches on Thursday after the debt-stricken government's request for an 85 billion euro EU/IMF bailout. It said its outlook on the rating was stable.
Fitch said that while Ireland had received relative security from the package, the fiscal costs of restructuring and supporting its banks had triggered the cuts.
Fiscal consolidation will last at least three, if not four or five years and it will take them a long time to get back with workable public finances, Pryce said on Friday.
Irish people will have to tighten their belts more than they have tightened them, he said.
Ireland's government detailed the toughest austerity budget on record this year, the first in a four year cycle of cutbacks totaling 15 billion euros, and a key plank of its agreement with the IMF and Europe.
The country's parliament will vote on changes to public sector pensions on Friday, the third of four pieces of legislation underpinning the budget.
Following the sovereign downgrade, Fitch downgraded on Friday the ratings of Allied Irish Banks and Bank of Ireland long- and short term issuer default ratings to BBB from A- and F2 from F1.
Fellow ratings agencies Moodys and S&P have Ireland on Aa2 and A respectively but both have put the country's sovereign rating on review for a possible cut.
Moodys said late last month that a multi-notch downgrade was the most likely outcome of a review expected to be concluded by early January but that Ireland would still remain within the investment-grade category.
Ireland is still higher than the BBB- rating -- one step above junk status -- that Fitch gave bailed-out euro zone member Greece earlier this year. (Reporting by Reuters Insider; Writing by Yara Bayoumy)
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