Is a Moody’s upgrade essential?
The Public Debt Management Agency (PDMA) has already drawn from markets €8.7 billion out of the planned €10 billion through bond issues. Thus, another issue is still a possibility, although several experts caution this is not necessary, and that the outstanding amount can be easily covered via the three planned reissuances.
At the same time, a new round of re-evaluations by credit rating agencies starts this month, with DBRS beginning on September 6, followed by Moody’s a week later. The latter is the only major credit agency not having upgraded Greece’s rating to investment grade. But it has recently upgraded several Greek banks’ debt.
Several analysts believe that the ever-cautious Moody’s will either do nothing or, at best, upgrade prospects to “positive” which would mean an eventual upgrade after 12-18 months.
And that’s all for the best, they believe. Capital inflows are already adequate and the bond market could face an upheaval later in 2024, with the political uncertainties in France and the US.
Next year, a credit upgrade, and the lower rates that go with it, would dovetail nicely with the end of European Central Bank support for Greek bonds.
