The recent decision by Standard & Poor's to downgrade its long-term sovereign debt rating on Finland to AA+ only had a minimal effect on the borrowing costs of the country. Secondary market interest rates on sovereign bonds issued by Finland crept up by 0.02 percentage points on Monday, with the interest rate on the ten-year bond settling at 1.04 per cent. In addition, the difference between interest rates on sovereign bonds issued by Finland and Germany remained unchanged as also the rates on German bonds rose.
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Impact of credit rating downgrade minimal
Calculations made by Nordea, a Nordic provider of financial services, suggest that the increase of 0.02 percentage points in secondary market interest rates will increase the annual borrowing costs of Finland by roughly three million euros.