Moody's raises ICO's rating to Baa2 with a positive outlook

Moody's raises ICO's rating to Baa2 with a positive outlook


It is the first upgrade to ICO since 2001.

ICO is guaranted by the Kingdom of Spain with a direct, explicit, irrevocable and unconditional guarantee and shares its same rating.

Moody's has upgraded ICO's rating from Baa3 to Baa2, with a positive outlook. This improvement follows the Kingdom of Spain's review last February 21st. ICO has the same rating as the Spanish government bond, because its liabilities are explicitly, irrevocably, directly and unconditionally guaranteed by the Kingdom of Spain.

This is the first upgrade by Moody's to ICO since 2001. Moody's is also the first rating agency to raise the credit rating of Spain and ICO in 2014.

Moody's was very upbeat about the performance of the Spanish economy, which had achieved progress "towards a more sustainable growth model". It also highlighted the progress made in implementing broad structural reforms, the increase in the country's external competitiveness and the diversification of exports.

This upgrade in ICO's rating also coincides with the improvement in funding conditions in recent months. In January, ICO launched a new EUR 1.25bn 2 year benchmark, which represented the agency's first issue in 2014, with a 1% coupon, the lowest ever in an ICO benchmark transaction. In addition, ICO returned to the Japanese market, after being absent for more than two years, with three new successful issues launched between November 2013 and January 2014. These issues demonstrate the steadily increasing confidence of foreign- investors in -ICO.

The upgrade from stable to positive paves the way for further rating improvements in future reviews.

Moody's report