Standard & Poor's downgrades Landsvirkjun's credit rating
The credit rating agency Standard & Poor's has changed its methodology as regards the credit assessment of government related corporates.
The credit rating agency Standard & Poor's has changed its methodology as regards the credit assessment of government related corporates.
The result is that Landsvirkjun's credit rating as regards foreign loans falls from BBB- (observation list) to BB (stable prospects). Credit ratings on domestic obligations have also been downgraded to BB (stable prospects).
Internationally, the changed methodology means that today Standard & Poor's downgraded the credit ratings of two state-owned companies, upgraded the credit ratings of five and placed ten companies on its observation list.
Landsvirkjun first received a credit rating in 1998, and this is the first time that the company has received a rating that is lower than a comparable rating of the Treasury. Landsvirkjun's loan agreements do not contain any provisions that require the termination or amendment of its loan agreements even if its credit ratings are downgraded.
The change, therefore, has no effect on the interest terms of the company's earlier loans. However, the change will, all things being equal, have a negative effect on Landsvirkjun's access to new credit on acceptable terms.