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Portugal and the credit crisis
Posted: 09:25 Thu 25 Mar 2010
by jdaw1
Yesterday [url=http://www.fitchratings.com/]Fitch Ratings[/url] wrote:Fitch Downgrades Portugal to 'AA-'
Fitch Ratings has downgraded Portugal's Long-term foreign and local currency IDRs to 'AA-' from 'AA'. The Rating Outlooks on the Long-term IDRs are Negative. Although Portugal has not been disproportionately affected by the global downturn, prospects for economic recovery are weaker than EU15 peers, which will put pressure on its public finances over the medium term.
Password-requiring press release.
Re: Portugal and the credit crisis
Posted: 01:38 Sat 27 Mar 2010
by Andy Velebil
Now if only the Euro would drop in value compared to the dollar by next Sept/Oct I would be elated.
Re: Portugal and the credit crisis
Posted: 14:26 Tue 09 Nov 2010
by jdaw1
(Continued at the
FT.)
I have never seen a downgrade to which the downgraded entity responds ‟not surprising, and a bit overdue”. Never. Stupider sovereigns threaten this and that (Turkey, in the 1990s, threatened a libel suit!); companies claim that the downgrade is unjustified. Always the way.
Re: Portugal and the credit crisis
Posted: 10:46 Wed 24 Nov 2010
by jdaw1
It seems that the unions have decided that reducing Portuguese GDP is the way forward, to national economic suicide. Ludicrous.
Re: Portugal and the credit crisis
Posted: 20:43 Wed 24 Nov 2010
by DRT
jdaw1 wrote:It seems that the unions have decided that reducing Portuguese GDP is the way forward, to national economic suicide. Ludicrous.
Perhaps they read the same newspapers are their French commrades?
Re: Portugal and the credit crisis
Posted: 14:32 Tue 21 Dec 2010
by jdaw1
Moody's wrote:Moody's Portugal: Fundamental Credit Risk Conference - NEW DATE
Wednesday, 19-Jan-2011
09:00
Lisbon, PORTUGAL
Re: Portugal and the credit crisis
Posted: 11:18 Fri 24 Dec 2010
by jdaw1
Re: Portugal and the credit crisis
Posted: 10:14 Wed 19 Jan 2011
by jdaw1
The FT, in an article entitled [url=http://www.ft.com/cms/s/0/422ca324-2342-11e0-b6a3-00144feab49a.html]Cost of Portuguese debt rises to unsustainable levels[/url], wrote:Portugal’s cost of borrowing brushed close to euro-era highs on Tuesday as Germany resisted calls to bolster the eurozone’s bail-out fund for heavily indebted economies on the continent’s periphery.
Portuguese bond yields jumped above 7 per cent ”“ a level that Lisbon has admitted is unsustainable ”“ after concerns rose that the eurozone crisis could worsen, following comments from Wolfgang Schäuble, the German finance minister.
Mr Schäuble appeared to put the brakes on plans to increase the size and scope of the €440bn ($588bn) European financial stability facility, at the end of ministerial meetings in Brussels.
Ralf Preusser, head of European Rates Research at BofA Merrill Lynch Global Research, said: ‟Every time policymakers see an improvement in market sentiment, even if in anticipation of policy action, they feel they are justified in stepping back from support. The market had traded positively because of hopes that we would get meaningful changes to the size and scope of the EFSF. This has now not materialised.”
(Continued at the
FT.)
Re: Portugal and the credit crisis
Posted: 08:54 Fri 04 Mar 2011
by jdaw1
Re: Portugal and the credit crisis
Posted: 19:14 Wed 09 Mar 2011
by jdaw1
Re: Portugal and the credit crisis
Posted: 14:08 Fri 11 Mar 2011
by jdaw1
The FT, in an article entitled [url=http://www.ft.com/cms/s/0/1105112e-4bd7-11e0-9705-00144feab49a.html]Portugal unveils tougher austerity measures[/url], wrote:Portugal has announced tough new austerity measures including cuts of up to 10 per cent in state pensions in a bid to ease pressure building on the government to seek a financial bail-out.
!
‟There can no longer be any doubt that we will achieve our goals,” he said. The minister also announced labour market reforms to improve the competitiveness of the Portuguese economy, which is facing its second recession in three years.
!
But the measures failed to have a positive impact on Portugal’s cost of borrowing with the yield on 5-year government bonds rising to a new euro-era high of just under 8 per cent. The yield on 10-year bonds also rose to 7.565 per cent.
(Continued at the
FT.)
Re: Portugal and the credit crisis
Posted: 09:50 Wed 16 Mar 2011
by jdaw1
Whole story at
Bloomberg News.
Re: Portugal and the credit crisis
Posted: 01:28 Thu 24 Mar 2011
by JacobH
The [url=http://www.bbc.co.uk/news/world-europe-12841492]BBC[/url] wrote:Portugal PM Jose Socrates resigns after budget rejected
Portuguese Prime Minister Jose Socrates has resigned after parliament rejected an austerity budget.
The defeat is likely to trigger a bailout similar to the rescue packages Greece and the Republic of Ireland had to accept last year.
All five opposition parties voted against the austerity measures, which included spending cuts and tax rises.
Presumably, in the good old days, the escudo would have gone through the floor, taking Port prices with it...
Re: Portugal and the credit crisis
Posted: 12:00 Fri 25 Mar 2011
by jdaw1
The FT, in an article entitled [url=http://www.ft.com/cms/s/0/0e3eb970-56ba-11e0-9c5c-00144feab49a.html]Portugal downgraded for second time[/url], wrote:Standard & Poor’s has cut Portugal’s credit rating by two notches, warning that the country’s political crisis heightened the risk that it would be unable to refinance its debt.
S&P's downgrade in Portugal’s long-term credit rating from A- to BBB is the lowest attributed by any rating agency, bringing Portugal’s credit standing closer to junk status.
S&P also warned that it could cut Lisbon’s rating by a further notch depending on the outcome of negotiations on the eurozone’s bail-out fund.
S&P’s decision on Thursday night came hours after Fitch Ratings downgraded Portugal’s long-term rating by two notches from A+ to A- because of increased financing risks caused by the fall of the Socialist government.
S&P and Fitch have both placed Portugal’s ratings on negative outlook, implying further downgrades could be made in the near future.
!
Interest rates on Portuguese government bonds of all maturities shot up on Thursday amid fears that the political void left by the prime minister’s resignation would make it difficult for the country to meet a total of €9.5bn in debt payments due in April and June.
More
in the FT.
Re: Portugal and the credit crisis
Posted: 16:35 Mon 28 Mar 2011
by jdaw1
The FT, an an article entitled [url=http://www.ft.com/cms/s/0/874cd302-5934-11e0-b9f6-00144feab49a.html]S&P cuts five Portuguese banks’ ratings[/url], wrote:Standard & Poor’s has cut the credit ratings of Portugal’s five largest banks and warned that it could cut the country’s sovereign debt rating for a second time within a week following the resignation of José Sócrates, the outgoing prime minister.
The bank downgrades follow S&P’s decision to cut Portugal’s long-term sovereign debt credit rating by two notches to triple B on Friday, after the collapse of the Socialist government plunged the country into a period of political and financial uncertainty.
The agency warned on Monday that a further cut in Portugal’s sovereign rating ‟could take place as early as this week”. That would lower the rating to triple B minus, one level above junk status.
!
S&P lowered the long-term ratings of four banks ”“ Banco EspÃrito Santo, Banco BPI, Caixa Geral de Depósitos and Banco Santander Totta ”“ to triple B, in line with the agency’s sovereign rating for Portugal. The previous ratings were A for Santander Totta and A minus for BES, BPI and CGD.
More in
that article in the FT.
Re: Portugal and the credit crisis
Posted: 08:43 Wed 30 Mar 2011
by jdaw1
The FT, in an article entitled [url=http://www.ft.com/cms/s/0/ac78e304-5a1b-11e0-ba8d-00144feab49a.html]S&P downgrades Portugal and Greece[/url], wrote:Standard & Poor’s has cut Portugal’s credit rating to one level above junk status on concern that commercial investors would suffer under the terms of a Europe-led financial rescue.
Tuesday’s downgrade, the second in a week, comes after the fall of the Socialist government plunged the country into a political crisis. It sent Portugal’s borrowing costs soaring.
Shares in Portuguese banks also fell sharply as S&P said it would assess the impact on lenders of its cut in the country’s sovereign rating. The agency cut the ratings of five Portuguese banks on Monday.
S&P cut Portugal’s rating to the lowest investment grade of triple B minus. Another downgrade to junk would have far-reaching implications for Lisbon as many investors can only buy investment grade bonds.
Greece also saw its ratings cut two grades to double B minus, three levels below investment grade.
More in that
FT article.
Re: Portugal and the credit crisis
Posted: 10:45 Thu 05 May 2011
by jdaw1
Re: Portugal and the credit crisis
Posted: 10:46 Thu 05 May 2011
by jdaw1
The FT, in an article entitled [url=http://www.ft.com/cms/s/0/59179b66-7680-11e0-b05b-00144feabdc0.html]Portugal delays pain it knows is inevitable[/url], wrote:Tuesday’s Portuguese rescue deal is being sold as a way to buy time. The €78bn ($116bn) package, agreed with the European Union and the International Monetary Fund, is welcomed because Portugal will gain a few more years to delay fiscal adjustment. But the victory will be short-lived, for fiscal problems alone are not what ails Portugal’s economy.
The IMF’s acronym is said to stand for ‟It’s mainly fiscal”. This maxim has certainly been applied by the IMF and the EU to Portugal, just as it was to the other struggling eurozone states. However, Portugal’s problem is one of foreign debt. Its ratios of public debt and deficit to gross domestic product are similar to France’s, yet France is not close to a fiscal crisis. This is because Portugal’s crisis is born not of public borrowing, but the debt of its private sector, in particular banks.
Continued in
that FT article.
Re: Portugal and the credit crisis
Posted: 22:04 Tue 05 Jul 2011
by jdaw1
Moody’s wrote:Moody's downgrades Portugal to Ba2 with a negative outlook from Baa1
The BBC, in an article entitled [url=http://www.bbc.co.uk/news/business-14038529]Portugal's debt is downgraded to junk status by Moody's[/url], wrote:The credit ratings agency Moody's Investors Service has downgraded Portugal's debt to junk status.
The agency said there was a growing risk the country would need a second bail-out before it was ready to borrow money from financial markets again.
Moody's was concerned that if there was a second bail-out, private lenders might have to contribute.
Portugal's government said Moody's had not taken into account the strong backing for austerity measures.
It said that the programme of economic measures announced last week was "the only way to reverse the course and restore confidence" in Portugal.
Re: Portugal and the credit crisis
Posted: 23:04 Tue 05 Jul 2011
by JacobH
jdaw1 wrote:Moody’s wrote:Moody's downgrades Portugal to Ba2 with a negative outlook from Baa1
Apologies for my ignorance, but how does the Moody’s rating system work if it goes from Baa1 to Ba2 (and presumably then on to Ba2 with a negative outlook)...?
Re: Portugal and the credit crisis
Posted: 23:12 Tue 05 Jul 2011
by jdaw1
See
Wikipedia, or, far better,
Pricing Money (2001), J. D. A. Wiseman.
As well as the rating (described on both of the above), there is also an outlook, which speaks of the likelihood of a rating change in the near future.
Re: Portugal and the credit crisis
Posted: 23:22 Tue 05 Jul 2011
by JacobH
I have been intending to buy a copy of that work for a while but keep holding off on the basis that a new edition is surely just around the corner
jdaw1 wrote:As well as the rating (described on both of the above), there is also an outlook, which speaks of the likelihood of a rating change in the near future.
I may not have been paying enough attending in my statistics lessons but surely if you say the outlook (meaning the likelihood of change) is negative, then you mean that it has already changed? And are ‟Speculative grade” ratings really known as either ‘‟High Yield” or ‟Junk”’, without irony?
Re: Portugal and the credit crisis
Posted: 23:45 Tue 05 Jul 2011
by jdaw1
JacobH wrote:I may not have been paying enough attending in my statistics lessons but surely if you say the outlook (meaning the likelihood of change) is negative, then you mean that it has already changed? And are ‟Speculative grade” ratings really known as either ‘‟High Yield” or ‟Junk”’, without irony?
It seems that you were paying plenty of attention. Market participants treat a directional outlook (positive or negative) as a fractional move in rating.
But sometimes companies being taken over have a non-directional ‘events might move this up or down’ outlook, which doesn’t quite fit the same model.
Re: Portugal and the credit crisis
Posted: 23:47 Tue 05 Jul 2011
by jdaw1
JacobH wrote:I have been intending to buy a copy of that work for a while but keep holding off on the basis that a new edition is surely just around the corner
Guarantee: if a new edition of
Pricing Money by the same author is published in or before July 2013, I’ll swap your old for a copy of the new.
Re: Portugal and the credit crisis
Posted: 23:52 Tue 05 Jul 2011
by DRT
Where does one purchase this fine work to ensure that the author receives his appropriate share?