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Irish Banks Cut to Junk by Moody’s After Country Rating Cut

Monday, 18 Apr 2011 10:19 AM

Moody’s Investors Service downgraded the long-term deposit ratings of five Irish banks to junk after last week’s downgrade of Irish government debt.

Allied Irish Banks Plc, Bank of Ireland, EBS Building Society, Irish Life & Permanent Group Holdings Plc were reduced by two notches and ICS Building Society by one step, the ratings company said in a statement today. Bank of Ireland and ICS are rated Ba1, the highest junk rating, and the rest are ranked Ba2.

“The outlook on the long-term bank deposit and unguaranteed senior unsecured debt ratings of these institutions is negative, in line with the outlooks on the government rating and on the stand-alone ratings of the banks,” Moody’s said.

The ratings company cut Ireland’s credit rating two levels on April 15 to the lowest investment grade as the government struggles to lower the budget deficit and restore economic growth. Irish taxpayers may spend as much as 100 billion euros ($145 billion) trying to solve Europe’s worst banking crisis as the country draws funds from last year’s bailout.

ICS is a unit of Bank of Ireland.

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