S&P chops Irish rating

City A.M. Reporter
STANDARD and Poor&rsquo;s (S&amp;P) yesterday cut Ireland&rsquo;s sovereign credit rating for the second time in three months and warned it could fall further because of concern about the soaring cost of bailing out the country&rsquo;s banking sector.<br /><br />Ireland is now rated at &ldquo;AA&rdquo; with a negative outlook, S&amp;P said. It was previously &ldquo;AA+&rdquo; and the country had a precious &ldquo;triple-A&rdquo; rating only three months ago. S&amp;P said in a statement: &ldquo;The rating could be lowered again if asset quality in the Irish banking system deteriorates at a faster pace than we expect.&rdquo;<br /><br />The cost of protecting Irish government debt against default rose to 221 basis points from 215 basis points seen just before S&amp;P said it was downgrading Ireland&rsquo;s debt, according to monitor CMA DataVision.<br /><br />This means it now costs &euro;221,000 per year to insure an exposure of &euro;10m of Irish government bonds.<br /><br />Ten-year Irish government bonds underperformed euro zone benchmark German Bunds widening by four basis points to 204 basis points.<br /><br />Rival rating agency Moody&rsquo;s warned in April that it could also cut Ireland&rsquo;s AAA credit rating citing to the country&rsquo;s soaring debt levels.