DBRS upgrades Greece’s outlook to Positive

Canada-based rating agency DBRS upgraded Greece’s outlook from stable to positive late on Friday, but stopped short of upgrading its credit rating from BB (low), contrary to market expectations.

The decision leaves the country’s rating three notches below the coveted investment grade, where DBRS had placed Greece in its previous review last May.

DBRS recently issued a series of favorable reports on the Greek economy praising moves such as the Hercules plan for the securitization of bad loans. This optimism is reflected in the improved outlook, which points to an upcoming upgrade at the next review.

“Since the last rating review, progress is being made in several respects, leading to the Positive trend. A new majority government is in place with strong commitment and momentum in introducing its reform agenda. Pro-active public debt strategy has consolidated market access, and in addition, Greece is on course to pre-pay 2.7 billion euros of relatively more expensive debt owed to the International Monetary Fund. Moreover, the Hercules asset protection scheme looks set to support banks removing non-performing exposures from their balance sheets, while capital controls were fully lifted on September 1, 2019,” DBRS said in a statement.

This came just a week after Standard & Poor’s upgraded Greece’s rating by one notch, also to Positive, leaving the country three notches below investment grade.