Fitch raises ICO rating to BBB+

Fitch raises ICO rating to BBB+


The higher rating emerged in the wake of last Friday's rise in Spain's sovereign rating.

The rating agency Fitch has now raised ICO rating from BBB to BBB+, with outlook stable. This action follows a better sovereign rating for the Kingdom of Spain, issued by Fitch on Friday 25 April. ICO has the same rating as the Spanish Treasury, with Spain's explicit, irrevocable, direct and unconditional guarantee.

The higher Fitch rating was announced amid better economic prospects and healthier financing conditions, enabling Spain to issue debt at costs not seen since 2005.

This upgrade also responds to a raft of economic reforms - reforms in the employment market, for example, or pension reforms - improving the long-term prospects for Spain's sovereign debt. Fitch likewise welcomed the progress made over the last two years in terms of reducing the Spanish deficit, and the lesser likelihood of further government aid to the financial sector.

The upward review of ICO rating goes hand in hand with more positive investor sentiment and significant flows of foreign investment to Spain in recent months.

ICO arranged a number of roadshows during the first quarter of the year in a bid to draw in foreign investors, leading to debt issues in the amount of 3,680 million euros on a number of international markets, 70% outside Spain. The issues were taken up by investors in Europe, the US, Asia and the Middle East.

The new Fitch rating could pave the way for further improvements in the future.

Download Fitch report.