Greece secured its first credit rating upgrade of this year as Fitch Ratings announced late on Friday it has raised Greece’s rating from “BB-“ to “BB” and its rating outlook from “stable” to “positive”.
This move has taken Greece two notches below investment grade, making Fitch the first major rating agency to bring the country so close to the coveted level.
Standard & Poor’s and DBRS Morningstar have Greece three notches below investment grade, as Moody’s has Greece four notches within “junk” status.
Fitch said in its report that the sustainability of the Greek debt continues to improve, supported by the stable political framework, the sustainable increase of the gross domestic product and the history of fiscal overperformance in relation to the targets set.
Its positive outlook, Fitch added, reflects the improved prospects of political stability and implementation of policies after the elections of last July, that brought New Democracy in power, and the greater certainty the debt will continue to decline.
The next rating reports for Greece, by both Standard & Poor’s and DBRS Morningstar, are scheduled for April 24.
The timing of Fitch’s announcement is ideal for Athens that is pondering the issue of a new bond, possibly a 15-year one, next week, according to sources.
Staff statement following the fifth post-program mission to Greece
The mission of institution representatives completed its visit to Athens (Jan. 22-24) on Friday, as part of the fifth post-program mission to Greece.
Representatives of Greece’s creditors said they “held productive discussions” on Greece’s commitments and reviewed progress and remaining key challenges, and their report would be published in February.
A statement by the European Stability Mechanism (ESM) released on Friday read as follows:
“Staff from the European Commission, in liaison with staff from the European Central Bank, visited Athens from 22 to 24 January for the fifth post-programme mission to Greece. Staff from the IMF participated in the context of its Post-Program Monitoring (PPM) framework. Staff from the European Stability Mechanism participated in the context of its Early Warning System. The mission was prepared by technical discussions in the previous week.
“The mission held productive discussions on the situation, progress made, key challenges still facing the Greek economy and the policy priorities. Particular attention was paid to assessing the implementation of specific reform commitments for end-2019 annexed to the Eurogroup statement of June 2018 as well as the general commitment to continue and complete the key reforms launched under the ESM stability support program.
“Close dialog on economic policy priorities and challenges will continue going forward, and on a regular basis. The fifth enhanced surveillance report will be published next month.”
Binding offers for National Insurance expected in May
The sale procedures of National Insurance is in full swing, National Bank’s CEO Pavlos Mylonas said on Thursday. Speaking to reporters, the Greek banker noted that binding offers are expected to be submitted in March for the acquisition of 80 pct in National Insurance. Three groups have already submitted non-binding offers and the sale procedure is expected to be completed this year.
Mylonas expressed his satisfaction over the course of reducing National Bank’s non-performing loans. The bank plans to reduce its NPLs to 5.0 billion euros in 2020, from 22 billion in 2015, with the securitization plan projected to exceed 6.0 billion euros.
National Bank disbursed new loans worth 3.0 billion euros in 2019 and expects loan disbursement to move around these levels in 2020 as well, financing enterprises and households. Mylonas said a negative climate has been reversed and that demand for new loans has begun. He noted that a voluntary exit programme was expected to be completed in the first 10 days of February and that another similar programme would be launched. Commenting on the digital transformation of banks, Mylonas said that both international and in Greece the trend was to strengthen the advisory role of banks’ branch network as the majority of transactions will be made electronically.