Fitch Ratings hiked Portugal’s credit rating two notches to BBB, returning it to investment-grade status. Large institutional investors like pension funds are often required to abstain from buying bonds ranked below investment-grade. The move would also make its sovereign paper eligible for entry in benchmark bond indexes and could, therefore, draw billions of dollars of inflows. The ratings company justified its move saying they expected government debt levels to fall. Portuguese bond yields touched a three-year low on Friday on anticipation of an upgrade. Debt prices rise when yields move higher.
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