IRISH LIFE Permanent (IL&P) has had its credit ratings removed from “watch” for a possible downgrade by debt rating agency Standard Poor’s, which said it expected the lender to receive the necessary Government support to fund its business model.
IL&P’s ratings were placed on “Creditwatch” by the agency last November with a possible downgrade, just more than a month after the Government guaranteed the liabilities at the company and five other Irish-owned financial institutions. In a statement yesterday, Standard Poor’s said: “We consider that the funding guarantee has been of particular benefit to Irish Life in supporting the bank’s funding position.” The agency said it viewed IL&P as “of high systemic importance”. The agency confirmed IL&P with “A-“ and “A-1” ratings that are regarded as financially strong.
IL&P’s share price rose 4.3 per cent, or 9 cent, to €2.15, valuing the company at €595 million.
Of the four Irish banks, IL&P has the heaviest exposure to the wholesale money market. The Government is understood to be considering extending the bank guarantee scheme by insuring individual sales of bonds maturing beyond September 2010 when the guarantee expires. This will help IL&P’s funding, enabling the company to raise three- and five-year money.
The company is strongly capitalised but is expected to seek less than €500 million from the Government under recapitalisation.
Stockbroker Davy said last week that, of the Irish-owned banks, it expected only IL&P to make a profit in 2009-2010.
