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Correct: Fitch Affirms Ireland's LTLC IDR, STFC IDR, Assigns STLC IDR
February 20, 2017 / 4:12 PM / 9 months ago

Correct: Fitch Affirms Ireland's LTLC IDR, STFC IDR, Assigns STLC IDR

(The following statement was released by the rating agency) LONDON, February 20 (Fitch) This commentary replaces the version published on 22 July 2016 to include the bond rating of National Asset Management Ltd (NAMA). Fitch Ratings has affirmed Ireland's Long-term Local Currency (LTLC) IDR at 'A' with a Stable Outlook. The issue ratings on Ireland's Long-Term senior unsecured Local Currency bonds have also been affirmed at A. The Short-Term Foreign Currency (STFC) IDR has been affirmed at 'F1' and a new Short-Term Local Currency (STLC) IDR of 'F1' has been assigned. The rating of National Asset Management Ltd's (NAMA) guaranteed issuance has also been affirmed at 'F1', in line with the sovereign rating. Under EU credit rating agency (CRA) regulation, the publication of sovereign reviews is subject to restrictions and must take place according to a published schedule, except where it is necessary for CRAs to deviate from this in order to comply with their legal obligations. Fitch interprets this provision as allowing us to publish a rating review in situations where there is a change in our criteria that we believe makes it inappropriate for us to wait until the next scheduled review date to update the rating or Outlook/Watch status. The next scheduled review date for Fitch's sovereign rating on Ireland is 1H2017, but Fitch believes that a portfolio review is now warranted based on recent changes to our criteria. Fitch will make public a more detailed country-specific report outlining its rationale for these rating actions within 10 working days of this Rating Action Commentary. The rating committee that assigned the ratings included within this Rating Action Commentary was a portfolio review following recent changes to our criteria, and focused on three areas, namely the assignment of STLC IDRs, the review of existing STFC IDRs and the review of the notching relationship between existing LTLC IDRs and Long-Term Foreign Currency (LTFC) IDRs. The committee approved a variation from criteria on the basis that the review applied all relevant sections of our criteria related to the above rating types but did not apply the sections of the criteria related to LTFC IDRs, as the latter were not included in the scope of this review. KEY RATING DRIVERS The affirmation of Ireland's LTLC IDR at A reflects the following key rating drivers: -In line with the updated guidance contained in Fitch's revised Sovereign Rating Criteria dated 18 July 2016, the credit profile of Ireland does not support a notching up of the LTLC IDR above the LTFC IDR. This reflects Fitch's view that neither of the two key factors cited in the criteria that support upward notching of the LTLC IDR are present for Ireland. Those two key factors are: (i) strong public finance fundamentals relative to external finance fundamentals, and (ii) previous preferential treatment of LC creditors relative to FC creditors. Additionally, Ireland is a member of the eurozone currency union, which constrains the LTLC IDR at the same level as the LTFC IDR. The affirmation of Ireland's STFC IDR at F1 reflects the following key rating drivers: -In line with the updated guidance contained in Fitch's revised Sovereign Rating Criteria dated 18 July 2016, Ireland's STFC IDR is derived from the mapping to its LTFC IDR of A. The assignment of a STLC IDR of 'F1' to Ireland reflects the following key rating driver and its weight: HIGH The assignment of a STLC IDR is consistent with Fitch's approach to assigning ST ratings by using its LT/ST Rating Correspondence table to map the STLC IDR from the LTLC rating scale. According to Fitch's Rating Definitions, the Fitch Rating Correspondence Table is "a guide only and variations from this correspondence will occur". However, variations to this approach are rare in the case of sovereign ratings. Ireland's STLC IDR is derived from the mapping to its LTLC IDR of A. RATING SENSITIVITIES The main factors that could lead to a change in the LTLC IDR are as follows: - A change in the LTFC IDR - A change in the key factors or supporting factors for notching up of the LTLC IDR from the LTFC IDR The main factors that could lead to a change in the STFC IDR or the STLC IDR are as follows: - A change in the LTFC IDR (for the STFC IDR) - A change in the LTLC IDR (for the STLC IDR) The rating sensitivities outlined in the previous RAC dated 15 July 2016 are unchanged in respect of the LTFC IDR. Consistent with the criteria variation referred to above, a review of the LTFC IDR and associated rating sensitivities was not included as part of this review. ASSUMPTIONS The assumptions outlined in the previous RAC dated 15 July 2016 are unchanged in respect of the LTFC IDR. Consistent with the criteria variation referred to above, a review of the LTFC IDR and associated assumptions was not included as part of this review. Contact: Primary Analyst Federico Barriga Salazar Director +44 20 3530 1242 Fitch Ratings Limited 30 North Colonnade E14 5GN Secondary Analyst Marina Stefani Associate Director +44 20 3530 1809 Committee Chairperson Tony Stringer Managing Director +44 20 3530 1219 Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria Sovereign Rating Criteria (pub. 18 Jul 2016) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here _id=1019265 Solicitation Status here Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. 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