S&P revises Ireland outlook to stable

AAP, with a staff reporter

Standard & Poor's has revised the outlook on Ireland's credit rating from negative to stable after the country restructured how it finances its bank bailout as it will improve the country's finances.

"In our opinion, the exchange of promissory notes, which the Irish government had provided to Irish Bank Resolution Corporation, for long-dated Irish government bonds, should reduce the government's debt-servicing costs and lower refinancing risk," the ratings agency said.

S&P reaffirmed its 'BBB+' rating for Ireland.

Last week Ireland adopted emergency legislation that exchanged a €31 billion ($A40 billion) promissory note, issued to prop up the former Anglo Irish Bank, with long-term government bonds.

Exchanging the high-yielding promissory notes for the bonds will lower the country's borrowing requirements by €20 billion over the next decade, according to Prime Minister Enda Kenny.

Dublin's bailing out of its reckless banks eventually forced it to seek a sovereign bailout, accepting an €85 billion rescue from the European Union and the International Monetary Fund in November 2010.

Ireland hopes to become the first bailed-out eurozone nation to exit its rescue program by returning fully to the sovereign markets by the end of this year.

S&P said it believes "the success of the exchange increases the likelihood of a full return by Ireland to private financing and, therefore, of Ireland successfully exiting the EU-IMF bailout program, at the end of 2013".

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