Fitch likely to upgrade Portugal’s long term sovereign debt

The US ratings agency Fitch is likely to improve Portugal’s long term sovereign debt rating today. (Friday, September 12)

After maintaining the rating on Portugal’s debt at the same level in March, it is now likely that Fitch will give Portugal an upgrade.

Countries finance their public administration, services and defence through a mixture of taxes (both direct and indirect) and raising money from creditors on the international money markets and do this by issuing sovereign bonds or treasury notes (also known as gilts) which attract pension funds, among others. They do this through short, medium and long term bond issues of between 2, 5, 7, 10, 20 and 30 year maturities.

In September, 2024 Fitch maintained the republic’s rating at A- and changed its outlook from stable to positive while signalling that it could improve Portugal’s debt rating over the next 24 months.

It did not upgrade on March 14 but is likely to happen today to A with stable outlook. If it does it will follow the lead of the other major ratings agencies like DBRS (in January), and Standard & Poor’s in February and August.

“I think there will be an upgrade for Portugal since Fitch had already placed a positive outlook last year, in addition to the upgrades given by S&P and DBRS”, said the Head Analyst at Danske Bank, Jens Peter Sorensen in a statement to the business daily Negócios.