Canada-based rating agency DBRS upgraded Greece’s outlook from stable to positive on Friday, but stopped short of upgrading its credit rating from BB (low).
Therefore the country’s rating remained three notches below the coveted investment grade, where DBRS had placed Greece in its previous review last May.
DBRS had recently issued a series of favorable reports on the Greek economy, praising moves such as the Hercules plan for the securitization of bad loans, and this is now reflected on the improved outlook that points to an upcoming upgrade at the next review.
“Since the last rating review, progress is being made in several respects, leading to the Positive trend. A new majority government is in place with strong commitment and momentum in introducing its reform agenda. Pro-active public debt strategy has consolidated market access, and in addition, Greece is on course to pre-pay 2.7 billion euros of relatively more expensive debt owed to the International Monetary Fund. Moreover, the Hercules asset protection scheme looks set to support banks removing non-performing exposures from their balance sheets, while capital controls were fully lifted on 1 September 2019,” stated DBRS.
This came just a week after Standard & Poor’s upgraded Greece’s rating by one notch, with a positive outlook too, leaving the country three notches below investment grade.