Iceland receives mixed news from credit ratings agencies

Standard & Poor’s has followed Fitch Ratings in delivering positive news on Iceland’s creditworthiness. However, both companies have stopped short of upgrading the country’s ratings.

Standard & Poor’s has today announced it is removing Iceland from its CreditWatch danger list, where it has sat since the Icesave referendum earlier this year.

Standard & Poor’s sovereign rating for Iceland remains unchanged at BBB-/A-3 with negative outlook. The country was removed from the CreditWatch list because it appears the immediate danger to foreign credit of rejecting the Icesave deal was initially overplayed.

Meanwhile, Fitch Ratings; which yesterday removed its negative outlook on Iceland; has indicated to Bloomberg that, although this is good news for Iceland, its unchanged rating remains a so-called junk investment grade. The company does not feel it likely that the junk status on Iceland will be lifted within the next two years, or as long as the currency controls remain in place.

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