Credit ratings agency Standard & Poors has changed its outlook on Ireland from 'negative' to 'stable'.

The outlook revision reflects the agency's expectation that the exchange of promissory notes for longer term government bonds significantly reduces the Irish government's debt-servicing costs and refinancing risk, and supports medium-term fiscal consolidation.

By improving the government's debt-maturity profile, S&P said that the transaction also increases the prospects of Ireland leaving the European Union-International Monetary Fund bailout programme as planned at the end of 2013.

"We believe that the arrangement will, however, effectively add an amount equal to about 10% of GDP to the government's existing explicit debt burden, as our criteria define this term," the credit ratings agency stated in its outlook.

MF

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