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S&P revises up Ireland outlook to stable on bank debt deal

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(Globalpost/GlobalPost)

Standard & Poor's revised Monday 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," said the ratings agency.

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

Last week Ireland adopted emergency legislation that exchanged a 31-billion-euro ($42-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 euros 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 euro 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 programme 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 programme, at the end of 2013."

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http://www.globalpost.com/dispatch/news/afp/130211/sp-revises-ireland-outlook-stable-bank-debt-deal