Debt downgrade for 5 Irish banks

15 July 2011

Moody's Investors Service has downgraded the government-guaranteed debt of five banks in Ireland.

The ratings agency made the move following its reduction of the country's overall credit rating to junk status earlier in the week, the Financial Times Adviser reports.

It means Allied Irish Banks, Bank of Ireland, Anglo Irish Bank, EBS and Irish Life and Permanent - which was formed in 1999 following the merger of Irish Life and Irish Permanent - now have a negative outlook of Ba1.

The lenders have each issued public sector debt as part of the eligible liabilities guarantee scheme, Moody's noted, before adding that the downgrade will not damage other standings for the banks, such as bank deposit ratings and standalone bank financial strength.

It stated: "The downgrade of the government bond rating has not affected the unguaranteed long-term senior unsecured debt ratings, as we do not incorporate any government support into these ratings."

By Gary Cooper

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