The German-based rating agency Scope Rating GmbH on Monday upgraded Greece’s long-term foreign- and local-currency issuer ratings to BB from BB-, with a Positive Outlook, according to ANA.
The sovereign’s senior unsecured debt in both local and foreign currency was also upgraded to BB from BB-, with Outlook Positive. Furthermore, the agency also affirmed the short-term issuer rating at S-3 in both local and foreign currency, with a Stable Outlook.
According to Scope’s announcement, the main drivers underpinning the one-notch upgrade are:
(1) improved medium-term debt sustainability, backed by a track record of sustained fiscal discipline, a substantial cash buffer and a more robust debt profile as a result of Greece’s active debt management, which has also benefitted from debt relief measures coordinated via its multilateral lenders and more favourable financing rates
(2) Greece’s improved political stability and reform continuity following the formation of a single-party majority government after national elections held in July 2019. The new government led by Prime Minister Kyriakos Mitsotakis has prioritized a number of structural and business-friendly reforms aimed at addressing significant structural economic bottlenecks and attracting investment. Under the Scope’s sovereign rating methodology, the upgrade reflects improvements in the ‘domestic economic risk’ and ‘public finance risk’ categories of Scope’s assessment.
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