(Image source: Imagoeconomica)
Moody’s threatens Italy: junk bonds are now really scary
Italy ended up in the crosshairs of big banks international. At the threat Of Goldman Sachs: “Bets on the Spanish debt and not on the Italian one”, added that of Moody’seven heavier given the weight of the rating agency: “Btp at risk of junk“. Yesterday it was learned that Italy has become – reads the Journal – the only country among those followed by Moody’s that risks losing the”investment grade” in the judgments of the rating company. Which means to be downgraded from the current rating “Baa3” to the one immediately below, “Ba1“, leaving the last investment sector «not speculative» to enter the open sea of so-called junk bonds: extremely risky junk bonds. Being in the junk category would make investment in BTPs impracticable for institutional investors (such as large pension funds or financial multinationals) and would no longer allow the Bce Of accept i Italian debt securities for banking and money transactions.
In other words, – continues the Journal – it means making ours public debt difficult to finance on the markets if not at costs (ie the yields offered) much higher than the current ones. It sure is one strong pressure for the government, which from today will have to take it into account. Suffice it to say that the last downgrading for Btp dates back to spring 2020: the government cashed it Conte (the yellow-red one) in full pandemic. Since respite on the markets. What then, with the government Draghicould only consolidate. But now, with the revision of the Stability Pact upon us and a political premier at the Palazzo Chigithey might reopen the dances.
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