While Portugal breathed a sigh of relief as Canadian ratings agency DBRS opted to keep its rating at ‘investment grade’, the Financial Times has poured cold water on the news, suggesting DBRS is not even ‘important’ in its field. Right now, the agency’s rating is the only thing that qualifies Portugal for access to the ECB’s mass bond-buying programme, and by extension to “ultra-cheap borrowing”.
Pundits have long warned that any loss of DBRS confidence could send Portugal reeling backwards, and facing the prospect of a second bailout.
According to the FT, “investors still have plenty of reasons to regard the country’s bonds with scepticism”, though the decision by DBRS has dodged the “sharp sell-off predicted in the event of a downgrade”.
Instead of being upbeat, the FT has warned that DBRS’ decision is short-term, that a new evaluation is due in April, and that “DBRS is not a name that appears with any regularity” in global markets.
