Moody’s Thumbs Down on Upgrade With Tusk Debt Cut: Poland Credit
Moody’s Investors Service and Standard & Poor’s dashed hopes for a quick ratings upgrade for Poland as Prime Minister Donald Tusk rattled investors with a pledge to cancel bonds held by pension funds to cut public debt.
The government’s plans, designed to reduce its debt load by $37 billion, “risk undermining investor confidence” and “do not fundamentally alter our views” on creditworthiness, Jaime Reusche, an analyst at Moody’s in New York, said two days ago. Credit-default swaps, contracts insuring Poland’s debt against non-payment, rose to a two-month high yesterday, while German swaps declined, according to data compiled by Bloomberg.
Polish stocks slumped the most in the world and government bond yields rose to the highest level in almost a year as Poland unveiled changes to its pension system that stopped short of full nationalization.
The WIG20 Index (WIG20) retreated as much as 6.2 percent, the most since Sept. 2011, and traded 4.8 percent lower, the world’s worst-performing equity market today, to 2,197.52 at 4:29 p.m. in Warsaw. The volume of shares traded was more than double the gauge’s 30-day average. Bank Handlowy SA, the Polish unit of Citigroup Inc., dropped 7.3 percent, while Globe Trade Centre SA, the nation’s second-largest property developer, lost 7.7 percent.
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