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Rating agencies have not recognised Portugal's progress-BES CEO
May 30, 2013 / 11:04 AM / 5 years ago

Rating agencies have not recognised Portugal's progress-BES CEO

LISBON, May 30 (Reuters) - Credit rating agencies that still rate Portugal’s debt as “junk” have not recognised progress that has helped improve investor sentiment and made possible a return to the bond market, the head of the country’s second-largest listed bank said.

Speaking at a conference organised by Reuters and Portugal’s TSF radio on Thursday, Ricardo Espirito Santo Salgado, Chief Executive Officer of Banco Espirito Santo, pointed to a sharp improvement in Portugal’s risk perception and falling bond yields as evidence of progress.

“Investors have recognised Portugal’s efforts and achievements. However, rating agencies haven’t yet followed this movement,” he said.

The country’s 10-year bond yields are at around 5.5 percent, far below the January 2012 peak of over 17 percent.

In March, Standard & Poor’s upgraded its outlook on Portugal’s BB/B sovereign rating to stable from negative, but the country remains in “junk” territory for all three major agencies.

Salgado said the evolution of bank deposits in Portugal has been “positive” throughout the crisis, unlike fellow bailed-out countries Greece, Ireland and Cyprus.

But he added that “funding costs remain quite high, affecting the whole economy - the state, banks and companies”.

Portugal’s government and companies complain that access to credit remains too restricted and expensive here compared to core euro zone countries. (Reporting by Sergio Goncalves and Daniel Alvarenga; editing by Barry Moody)

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