This week international rating agency Fitch Ratings held a global portfolio rating committee related to an overhaul of the Agency's sovereign methodology released on May 26th, 2016. The results of the committee were published today. As part of the methodology adjustment Fitch changed its approach to the assessment of the long-term local currency (LTLC) ratings, bringing these ratings in line with the long-term foreign currency (LTFC) ratings for most sovereigns globally. In addition, Fitch has assigned new issuer default ratings (IDR) for short-term local currency (STLC) obligations. As part of the criteria related ratings recalibration, Fitch has lowered Iceland's LTLC rating in line with its LTFC rating of BBB+, which was affirmed by the Agency on July 15th with a stable outlook. The ratings for short-term obligations in both foreign and local currency have also been affirmed at F2 Iceland's sovereign ratings continue to be supported by the country's strong macroeconomic fundamentals, sustained improvements in fiscal and external indicators, and solid institutional base.
Corresponding changes will be made to the ratings of other sovereigns whose LTLC ratings were a notch above their LTFC ratings.
The Fitch press release can be found here : Fitch Applices Criteria Changes to Iceland‘s Ratings