PTSB’s credit rating upgraded by Moody’s

Moody’s, one of the world’s leading credit ratings agencies, has upgraded its stance on Permanent TSB’s (PTSB) creditworthiness, citing the lender’s improving profitability and commitment to lowering its non-performing loans.

Moody’s said on Thursday that it has raised its rating on PTSB’s long-term unsecured debt by one level to Ba2, which remains two rungs below what it considers to be “investment grade”, and suggested that it is inclined to upgrade again in the future.

PTSB agreed in July to sell €2.1 billion of non-performing loans (NPLs), which will bring its problem loans ratio down to 16 per cent from 25 per cent.

“Furthermore, Moody’s expects PTSB’s asset quality to continue to improve in the near term, driven by very low new arrears formation and the bank’s commitment to decrease its gross problem loans to below 10 per cent of total loans in the near term,” Moody’s said.

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Securitisation

PTSB is known to be planning to refinance up to €1.5 billion restructured mortgages through an off-balance sheet securitisation deal, which will allow the lender to cut its NPLs ratio below 9 per cent while still maintaining its day-to-day relationship with the underlying borrowers.

Separately, AIB ventured out into bond markets on Thursday with a deal to sell five year US dollar-denominated bonds.