Moody's lowers Malta's ceiling
Moody's has changed the long-term foreign currency bond and deposit ceilings, and the local currency country risk ceiling for Malta to A1 from Aaa.
The short-term foreign currency bond and deposit ceilings remain unchanged at P-1.
Moody said its decision is based on the its assessment of the elevated risk for economic and financial dislocations in the euro area, which calls for differentiated ceilings in the euro area based on country-specific factors.
Notwithstanding the strength of euro area member economies, further deterioration of the euro area debt crisis could limit the capacity of debt issuers to generate income, and access to liquidity and funding could be sharply curtailed to all classes of borrowers.
The lower ceilings for euro area members also reflect the impact on domestic issuers from the unlikely event a country exited the monetary union.
Moody's rates Malta's government debt at A3 with a negative outlook. The country's medium economic strength, high institutional strength, medium government financial strength and low susceptibility to event risk underpin the sovereign rating.