- On Friday S&P upgraded the sovereign rating of Greece to BB-. The outlook remains positive.
- The rating agency cites in particular the reduced budgetary risks, the removal of all capital controls, the improved economic outlook, and the advantageous debt profile of Greece.
- We share S&P’s overall positive assessment. The growth rate is expected to remain well above the euro area average and the new (conservative) government remains committed to fulfill its fiscal targets and to go ahead with economic reforms.
- Greek government bonds have been by far the best performing euro area government bond market year-to-date. Given the very low yield environment and speculations that Greek sovereign bonds will eventually be included in the ECB’s QE programme, we see leeway for a furter moderate spread tightening.
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OUT – S&P UPGRADES
OF GREECE TO BB-