DBRS is the rating agency keeping Portugal eligible for the ECB purchase programme. Portugal will have the rating it received from the Canadian agency reviewed – firstly in April, then in October.
The 21st of April and the 20th October. Portugal already knows the calendar DBRS has for 2017 concerning their most important rating decisions, being that they are the agency that keeps Portuguese bonds eligible for the European Central Bank’s debt purchase programme.
Currently, DBRS maintained Portugal’s rating at BBB (low), with a stable outlook for the country’s credit risk, which makes those who are responsible for the Portuguese Treasury feel comfortable there should be no changes in the Portuguese credit rating at least until April.
The stability of the agency’s perspectives for the country means they do not predict any changes in Portugal’s rating at least for the next few months. Besides, before making any changes in the rating, DBRS usually signals a long time ahead how they will proceed with their next decision.
DBRS’s decisions are particularly relevant to the Portuguese context. The Canadian agency is the only one among other main worldwide agencies to consider the Portuguese debt is above the “junk” category, assuring, this way, the Portuguese bonds are eligible for ECB’s public debt purchase programme. And with this rating, Portugal is able to have better financing conditions with international investors when issuing debt.
If it wasn’t for the so called “ECB effect”, Portugal would be paying over 5% interests – which would be the fair interest rate considering the economic fundamentals, instead of the 3.7% rate the Portuguese Republic is paying.
In their last rating decision, DBRS has stated the goal for the economic growth predicted by the Portuguese government is “optimistic”, highlighting, even so, that the reinforcement in the financial sector and fiscal execution were strengths that help maintain the rating.