+ moody's downgrades ireland's rating to aa2, sa - Irish Bank ...

+------------------------------------------------------------------------------+MOODY'S DOWNGRADES IRELAND'S RATING TO AA2, SAYS OUTLOOK STABLE2010-07-19 06:17:48.538 GMT(The following press release from Moody's Investors Service wasreceived by e-mail. It was not confirmed by the sender.)Moody's downgrades Ireland to Aa2, stable outlookFrankfurt, July 19, 2010 -- Moody's Investors Service has todaydowngradedIreland's government bond ratings to Aa2 from Aa1. The main drivers forthe downgrade are:1. The government's gradual but significant loss of financial strength,as reflected by the substantial increase in the debt-to-GDP ratio andweakening debt affordability (as represented by interest payment togovernment revenue).2. Ireland's weakened growth prospects as a result of the severedownturnin the financial services and real estate sectors and an ongoingcontraction in private sector credit.3. The crystallization of contingent liabilities from the bankingsystem,as represented by a series of recapitalization measures and the need tocreate the National Asset Management Agency (NAMA), a governmentcreatedspecial purpose vehicle that is acquiring impaired loans from banks.Moody's has changed the outlook on the ratings of the government ofIreland to stable from negative as the rating agency now views theupsideand downside risks as being evenly balanced at the current ratinglevel.Moody's has also affirmed Ireland's short-term issuer rating of Prime-1with a stable outlook. Ireland falls under the Eurozone's Aaa regionalceilings for bonds and bank deposits, which are unaffected by the Irishgovernment's downgrade.Moody's has also downgraded to Aa2/stable outlook from Aa1/negativeoutlook the rating of Ireland's National Asset Management Agency(NAMA),whose debt is fully and unconditionally guaranteed by the government ofIreland.RATIONALE FOR DOWNGRADE

At the Aa2 rating level, the upside and downside risks are evenlybalanced. "If the GDP growth trend were to exceed Moody's expectations-- with a quick resumption of domestic credit flow and a supportiveglobal economic environment -- then the government's debt metrics couldstabilize earlier than is currently being assumed," says Mr. Hornung.On the other hand, Moody's notes that the country could experiencedownward rating pressure in the event of (i) a failure of the economytorebound in a meaningful way; and/or (ii) a severe deterioration in thecountry's debt metrics triggered by a further crystallization of bankcontingent liabilities beyond Moody's current expectations.For further information, please refer to Moody's Special Commententitled"Key Drivers of Ireland's Downgrade to Aa2," which is available onwww.moodys.com.PREVIOUS RATING ACTION & METHODOLOGYMoody's last rating action affecting Ireland was implemented on 2 July2009, when the rating agency downgraded Ireland's government bondratingsto Aa1 and assigned a negative outlook. Prior to that, Moody's lastrating action on Ireland was taken on 17 April 2009 when the ratingagency placed the government bond ratings on review for possibledowngrade.Moody's last rating action affecting NAMA was implemented on 16 June2010, when the rating agency assigned an initial rating of Aa1 with anegative outlook to the senior unsecured debt issued by NAMA, which isbacked by a full guarantee from the Irish government.The principal methodology used in rating the government of Ireland andNAMA is "Moody's Sovereign Bond Methodology", which was published in2008 and can be found at www.moodys.com in the Rating Methodologiessub-directory under the Research & Ratings tab. Other methodologies andfactors that may have been considered in the process of rating thisissuer can also be found in the Rating Methodologies sub-directory onMoody's website.New YorkBart OosterveldMD - CCO Pub, Proj & Infra FinSovereign Risk GroupMoody's Investors ServiceJOURNALISTS: 212-553-0376SUBSCRIBERS: 212-553-1653FrankfurtDietmar HornungVP - Senior Credit OfficerSovereign Risk GroupMoody's Deutschland GmbHJOURNALISTS: 44 20 7772 5456SUBSCRIBERS: 44 20 7772 5454

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Information regarding certain affiliations that may exist betweendirectors ofMCO and rated entities, and between entities who hold ratings from MISand havealso publicly reported to the SEC an ownership interest in MCO of morethan 5%,is posted annually at www.moodys.com under the heading "ShareholderRelations -Corporate Governance - Director and Shareholder Affiliation Policy."Any publication into Australia of this document is by MOODY'Saffiliate,Moody'sInvestors Service Pty Limited ABN 61 003 399 657, which holdsAustralianFinancial Services License no. 336969. This document is intended to beprovidedonly to "wholesale clients" within the meaning of section 761G of theCorporations Act 2001. By continuing to access this document fromwithinAustralia, you represent to MOODY'S that you are, or are accessing thedocumentas a representative of, a "wholesale client" and that neither you northeentityyou represent will directly or indirectly disseminate this document oritscontents to "retail clients" within the meaning of section 761G of theCorporations Act 2001.This credit rating is an opinion as to the creditworthiness or a debtobligationof the issuer, not on the equity securities of the issuer or any formofsecurity that is available to retail investors. It would be dangerousforretailinvestors to make any investment decision based on this credit rating.If indoubt you should contact your financial or other professional adviser.-0- Jul/19/2010 06:17 GMT