Ireland slips to junk status at the Moody’s rating

Ireland’s credit rating was cut by Moody’s to junk this week. The ratings agency warned that the country would need a second round of bailout.

Ireland’s downgrade comes a week after Moody’s lowered the rating for Portugal to junk status with a similar advice to get a second bailout. The credit rating agency sees that private investors need to share the pain of helping sinking European nations.

Meantime, for the first time European finance ministers acknowledged the need to allow some form of Greek default to cut Athens' debts and if successful Ireland’s rating could be set for a further round of cuts.

Ireland is now rated by Moody’s at Ba1, which is one notch below Colombia and two notches below Brazil with a negative outlook of further downgrades.

However, Ireland’s rating is still one notch above Portugal and six above Greece. Both Standard & Poor's and Fitch Ratings have Ireland at BBB-plus, three notches above junk status.