Standard & Poor: reviewing Iceland for a possible downgrade
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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