Faroes retain Aa2 credit rating

Credit rating agency Moody’s announced yesterday that the Faroes will retain their current Aa2 credit rating.

Defined as having “a very strong capacity to meet its financial commitments”, Aa2 is the third-highest rating on the 21-tier scale of the country risk rating scale. Other nations with an Aa2 rating include the UK and France.

The decision comes after a series of video meetings in June between Moody’s and the government, the opposition and the national bank.

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Although the Faroese external debt will increase significantly this year due to the Covid-19 pandemic, Moody’s expects this debt to decrease again as early as next year.

In May, the government took out loans totalling DKK 3 billion. Half of this amount went to refinancing loans that fell due on 11 June. The other half was spent on filling 2020 and 2021 budget holes caused by the Covid-19 crisis.

Translated by prosa.fo