Moody’s: ‘Silence’ … for the second time this year – He did not evaluate Greece

Moody’s finally denied the expectations for upgrading Greece’s credit rating that had been cultivated in recent days, as for the second time this year it kept a “quiet fish” by not publishing a report on the Greek economy, as planned, closing in a rather “ignorant” way the cycle of appointments of the country with the rating agencies.

It is noted that the house rates the Greek economy at Ba3 with stable prospects, giving the country the lowest rating (three steps below the investment grade), as S&P, Fitch and DBRS all rank Greece two steps below the investment grade.

Moody’s had observed “silent fish” during the previous scheduled evaluation in May, and thus has not changed the evaluation of Greece since November 2020 when it had upgraded it by one step, from B1, with positive prospects. It had also preceded more than a year of waiting before this 2020 upgrade as the previous change of its rating had been made in March 2019 with a double upgrade.

The hopes for upgrading the country’s debt owed today by the house had been cultivated by Moody’s recent report on Greek banks, where it gave a “vote of confidence” to National Bank, Piraeus Bank, Eurobank and Alpha Bank, due to the improvement of loan repayment. and the solvency of the four systemic banks.

As the house pointed out in its report, Greek banks have significantly reduced NPEs by 70% from their peak, as both Greek and Cypriot banks have securitized or sold non-performing exposures to reduce the risk on their balance sheets. benefiting from the “Hercules” plan.

The house estimated that such actions will lead to most of the further reduction of NPEs of Greek banks, with some contribution from NPEs restructuring and liquidation of collateral.

The forecast NPE indices indicate that all Greek banks are on track to achieve ambitious targets for single-digit indices by the end of 2022, he adds, with Eurobank and NBG leading the process as they aim to reach indices around 6% or 7% in the coming months, Moody’s said in a recent report.

Meanwhile, the house expressed itself positively for the country and on Thursday (18/11) in its report on the credit prospects of the eurozone countries in 2022 (just a few hours before its planned “verdict” for Greece), examining the challenges around debt and boosting growth on the road back to “normalcy”.

As he pointed out, the high debt levels caused by the pandemic will be the biggest “headache” for economies and governments and the biggest risk for their borrowing costs, while the withdrawal of support measures and the ample shock increase the risks. growth and substantially undermine debt relief efforts.

Greece, however, as the house pointed out, although it will continue to have a very high level of debt to GDP, will nevertheless record the largest decrease in 2022, with the significant impetus to the growth that will give the resources of the Recovery Fund from now until in 2017, to help in the further and gradual fall of the debt.

It is worth noting that S&P also “passed” its second rating for Greece this year, which was scheduled for October 23, something that was partly expected then as the house had already upgraded Greece last April to BB with positive prospects (two steps away from the investment stage) and was considered “exaggeration” a new upgrade of the country in such a short time.

For next year, Fitch opens the “dance” of ratings in mid-January, with the other three companies following.