Credit agency raises IBRC's rating

Standard and Poor's has today raised its credit rating for the former Anglo Irish Bank to stable.

The ratings agency said the decision to place Irish Bank Resolution Corp's (IBRC) on stable outlook reflected its expectation that any further deterioration in the bank's capitalisation will remain manageable.

However, it warned the bank still has a way to go to demonstrate that the run down of its loan book would be completed in a "predictable manner."

S&P raised its long-term counterparty credit rating on IBRC to B- from CCC+. It also affirmed the short-term counterparty credit rating at C.

The agency estimated that the bank had reduced its outstanding senior unsecured unguaranteed debt obligations to less than €150 million. It also said it did not believe that there were any more unsecured bondholders to account for.

"We believe that the likelihood of the Irish Government introducing burden sharing on senior unguaranteed and unsecured bondholders has passed," the agency said.

S&P said the bank had been steadily reducing the outstanding amount of its senior unsecured unguaranteed debt obligations as it progresses with the work-out of its loan book.

"The vast majority of IBRC's remaining liabilities now relate to borrowings from monetary authorities," it said.

The agency said  that it believed the bank still has to prove the run-off would be completed in a predictable way.

"IBRC's stated primary focus is the orderly work-out of its loan book over a planned period of up to 10 years. We believe, however, that IBRC has become a more stable institution following the plethora of compulsory changes it underwent after its nationalisation in 2009," it said.

"We assume that IBRC will continue to generate adequate pre-provision operating income and that, while loan impairment charges and related nonrecurring expenses may remain elevated, the impact on its capital position will remain manageable," it said.

S&P added it could raise the ratings from adequate to moderate if IBRC's successful deleveraging and operating performance gave it confident that the wind-down of its operations will progress in a predictable manner.

However, it added it could lower the ratings if IBRC's link to the Government were to weaken.