Sigrún Davíðsdóttir's Icelog

Standard & Poor: reviewing Iceland for a possible downgrade

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Standard & Poor’s Ratings Services has announced it is reviewing Iceland for a possible downgrade, following the Icesave referendum this weekend.

“The prolonged dispute over the Icesave issue could weaken Iceland’s relationship with other European countries, increase its external financing risks, and hinder Iceland’s economic prospects as well as delay the lifting of capital controls and its return to international capital markets.”

S&P expects the dispute to return to the EFTA court and that it might take a year or more  for a ruling to come down. S&P has Iceland’s foreign currency credit rating at triple-B-minus, the brink of junk territory, and its local currency rating one step higher at triple B.

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Written by Sigrún Davídsdóttir

April 13th, 2011 at 2:28 pm

Posted in Iceland

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