(Reuters) - Ireland's credit rating was cut to junk status by ratings agency Moody's which said the country will likely need further rounds of official financing before it can return to international capital markets. Moody's cut Ireland's ratings by one notch to Ba1 from Baa3 and kept a negative outlook on the rating.
SUVRAT PRAKASH, INTEREST RATE STRATEGIST, BNP PARIBAS, NEW YORK:
"It's amazing that Ireland was still investment grade, it seems like a lagged effect to me. Now that the market has made up its mind what sort of rating is appropriate for Ireland, the market hasn't been strictly paying attention to these downgrades. However, the market is reacting. Credit spreads are widening, and stocks and rates moving a little lower on this news and mortgage bonds are wider. It looks like risk appetite has come off, but the news itself shouldn't be a surprise to anyone. A lot of people assume that these rating agencies tend to move with a lag, so there could be more downgrades to come. Sometimes it triggers forced selling from funds that can only hold bonds with a certain rating."..........read on
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