Credit ratings agency Standard and Poor’s has become the first major ratings agency to restore an A rating to Irish sovereign debt.

S&P has upgraded its long-term foreign and local currency sovereign credit ratings on Ireland from BBB+ to A-.

At the same time, it affirmed the short-term ratings at 'A-2'. 

It cited an improved outlook for economic growth, and a better outlook for the repayment of Government debt. 

It also noted the faster pace at which NAMA is paying down its debt.

S&P has reviewed the 2014-2016 growth projections for Ireland upward to 2.7% from 2.0%. 

The credit ratings agency added that the outlook is positive, reflecting its view of at least a one-in-three possibility that it could raise the ratings on Ireland again in the next two years.

The upgrade has been welcomed by Minister for Finance Michael Noonan.
 
"This upgrade to A- rating by S&P's highlights the continued improvement in Ireland's credit worthiness.

"I am particularly pleased that this upgrade is being driven by S&P's view on the improved prospects for the domestic economy.

"This is a view I share and with thousands of jobs being created each month, strong exchequer performance and with positive high-frequency indicators, I am confident that we are moving in the right direction.
 
"S&P specifically recognise the benefits to Ireland's credit worthiness from NAMA's accelerated bond repayment.

"De-risking Ireland's is a key priority and it is particularly apt that this rating upgrade is being released just hours after the publication of the details of the IBRC Special liquidation.

"Overall, this upgrade to A- is a very positive development, will further drive down bond yields and attract further investment in Ireland," Mr Noonan said. 

Commenting on the upgrade NTMA Chief Executive John Corrigan said: "Today’s decision by S&P marks the first A rating of Ireland by any of the major credit rating agencies since the normalisation of Ireland’s return to the bond markets.

"It represents a further confirmation of the continuing positive assessment of Ireland by the major credit rating agencies.

"It also underpins the already strong investor sentiment towards Ireland and provides a very supportive backdrop for the remainder of the NTMA’s funding programme in 2014. It is gratifying to note that the bond market access achieved by Ireland and the progress made by NAMA are among the positive factors cited by S&P."

Elsewhere, S&P held its US debt rating unchanged at AA+, nearly three years after dealing Washington a historic cut to its top-flight rating.

S&P said the rating outlook was only stable, saying the country's "polarized policy making environment and high general government debt and budget deficits" prevent a return to AAA status.