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Moody's would formally review UK's credit profile in case of no-deal Brexit

Moody's was out on the wires in early Asia assuring markets that the vote against the UK PM May's Brexit deal is not, in itself, sufficient grounds for Moody's to shift base to a no-deal scenario. 

The ratings agency, however, would review the UK's credit profile in case of the no-deal scenario. 

Key points (Source: Reuters)

  • Vote against the withdrawal agreement extends Brexit uncertainty, raises risks for UK issuers.
  • The outcome of vote further extends period of uncertainty over the UK's relationship with the EU, a credit negative for many rated issuers.
  • Vote against Brexit deal is not, in itself, sufficient grounds for moody's to shift the base case to a no-deal scenario.
  • In case of the no-deal scenario, would formally review the UK's credit profile and other affected issuers.
  • Extension of article 50 would have negative credit implications in the short term due to extension of uncertainty, hampering of business activity.

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