By Tasos Dasopoulos
The Fitch house, which has rated the economy in the BB grade since January 2020 with stable prospects, makes a step in the Greek debt ratings on Friday, January 14th.
The forecast wants the house to change the assessment of the outlook of the economy from stable to positive. But it will be a positive surprise if it upgrades its creditworthiness.
In its report, the foreign house will include the positive news about the extension of the Greek bond markets after the end of the PEPP by the ECB announced last month. It should also take into account the clearly faster pace of economic recovery. The house in its last assessment last July predicted a growth of 4.5% for 2021. The growth rate is now estimated at 7% based on the official budget forecast.
On the other hand, it should take into account the effects of the spread of the “Omicron” mutation, but also the potential risks of maintaining inflation at high levels in 2022. The data concerns rating agencies, not only for Greece.
In terms of debt, the house has repeatedly confirmed its viability and the very positive profile of long-term maturities and low financing needs.
Uncertainties over the period – as estimated by market executives – will lead Fitch to once again postpone the upgrade of the country’s credit rating, perhaps for the second rating on July 8 or the third, on October 21, which are scheduled by the house for 2022.
The first edition in 2022
Regardless of the result of the evaluation, the Ministry of Finance is expected before the end of the month to proceed with the first issue of a bond for 2022, probably for a 10-year bond, in order to improve the liquidity of the title which is a reference point for each country.
The choice to start issuing from the beginning of the year, although there is no immediate need to be met, has a dual purpose: To take advantage of the excess liquidity that exists at the beginning of each year from the liquidations made at the end of 2021 and also to catch up with the issues of the major European economies, but also the EU itself, which has announced that it will borrow 50 billion in the first months of 2022.
The other ratings
The next issues of Greek debt will be selected depending on the course of the markets and will be made in connection with the ratings of the houses. Competent sources of YPOIK estimated that the rating agencies are expected to start taking a more positive attitude towards Greece from the spring. This is because until then there will be a clear picture of the closing of 2021 and a first idea for the course of the Greek economy in 2022.
In this regard, the evaluation program by the major rating agencies provides that:
– The House Standard and Poor’s who has rated Greece on the BB scale in April 2021 with positive prospects will evaluate Greece twice in 2022: On April 22 and October 21.
– The Canadian house DBRS who has rated Greece on the BB scale since September 2021 with positive prospects will evaluate Greece in 2022 twice: on March 18 and on September 16.
– The house Moody’s who has rated Greece on the Ba3 scale since November 2020 with stable prospects will evaluate Greece in 2022 twice: on March 18 and September 16.
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Source From: Capital
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