In accordance with Regulation (EC) No. 1060/2009 of the European Parliament and of the Council, EthiFinance Ratings published in the month of December 2025 the Sovereign Rating Calendar for 2026.

https://www.ethifinance.com/regulatory/

EthiFinance Ratings has developed and released its Debt Investment Fund (DIF) Rating Methodology, which details the process by which the agency assigns ratings to the debt issued either by a master fund (MF) holding the underlying loans, or by its corresponding feeder fund, which invests in the MF as a limited partner (LP). 

In both cases, the rated debt is secured by the underlying loans held by the MF. The issuing vehicle may adopt different legal forms, such as a special purpose vehicle (SPV) or a designated activity company (DAC), among others. 

The new methodology is available on EthiFinance Ratings’ website under the Methodologies section. 

May 20, 2025

EthiFinance Ratings has just published a ‘principles behind credit ratings’ document that presents the main credit principles that support methodology development, and by extension credit ratings assigned by EthiFinance Ratings through the course of its business.

This document is not a methodology per se but can be used by the analysts to assign credit ratings in the absence of a dedicated methodology.

EthiFinance Ratings has amended its Credit Rating Disclosure Policy to allow public viewing of all unsolicited credit ratings. With this decision, EthiFinance Ratings aims to increase transparency and accessibility of our credit ratings for all sectors. The change will take effect today, Wednesday 12th of March.

This methodology is composed of two parts. The first part is entirely new and covers Real Estate Investment Companies. Meanwhile, the second part replaces the previous ‘Corporate rating – Commercial Real Estate’ methodology that is therefore discontinued as it has now been merged within this new Real Estate methodology. EthiFinance Ratings does not have any existing ratings covered by the ‘Commercial Real Estate’ methodology at the date of this release, and therefore does not report any expected changes to any existing ratings.

The Request for Comments (RfC) was launched on November 25, 2024 and was closed on January 14, 2025.

The RfC related to the upcoming corporate methodology for Real Estate Investment Companies & Real Estate Transactions. During that time, no comments were received.

In accordance with Regulation (EC) No. 1060/2009 of the European Parliament and of the Council, EthiFinance Ratings published in the month of December 2024 the Sovereign Rating Calendar for 2025.

EthiFinance Ratings is launching a request for comments for its new Corporate rating methodology – Real Estate Investment Companies & Real Estate Transactions and is inviting market participants to submit their comments and suggestions.

The Request for Comments period is starting on the 25th of November and is expected to last at least until the 26th of December. Unless specified otherwise, these comments will be considered as public. Comments should be submitted at the following email address: rfc@ethifinance.com. The final version is expected to be published and implemented in Q1 2025.

This methodology comprises two sections. The first one details how EthiFinance Ratings assesses companies whose main purpose is to own real estate assets and to derive revenues from the rental of these assets. The second part is a revision of the existing Corporate rating methodology – Commercial Real Estate (CRET) that EthiFinance Ratings wishes to merge within a single Real Estate Investment methodology. EthiFinance Ratings currently has no ratings covered by the CRET methodology, and will discontinue this methodology upon publication of the new framework.

EthiFinance Ratings, an independent European credit rating agency, upgrades the rating of the Republic of Portugal from BBB+ to A-, with an outlook change from Positive to Stable, driven by both methodological changes and improvements in the country’s fundamentals, including the swift return to fiscal surpluses following the pandemic, a positive macroeconomic environment, and a strong ESG assessment, underlining the capacity and commitment to meet financial obligations.

Specifically, EthiFinance Ratings projects growth rates of 1.8% for 2024 and 1.9% for 2025, though these figures remain below the potential growth rate of 2.2% estimated by the European Commission. In addition, the agency expects unemployment to remain stable, with projections of 6.5% for 2024 and 6.4% for 2025, according to the European Commission, as a result of an increase in the labor force, while employment rates continue to evolve positively, reaching a historic high of 75.3% in 2023.

The report also highlights the swift correction of public account imbalances following the pandemic, resulting in a fiscal surplus of 1.2% of GDP in 2023. This rapid adjustment was driven by a strong economic recovery, increased tax revenues, and the gradual phase-out of pandemic-related expenditures. While this surplus is expected to moderate, it is projected to remain positive in 2024 and 2025 (0.2% for both years, according to the IMF). In this context, fiscal prudence is contributing to a reduction in public debt levels, which reached 99.1% of GDP in 2023. However, public debt remains high, posing one of the primary constraints on the country’s rating.

Furthermore, wealth levels remain modest, with a GDP per capita around 60% of the Eurozone average, and according to the study, the country faces significant demographic challenges, with an aging population that could create increased fiscal pressures and impact growth potential. At the same time, the agency expects public investment to increase, supported by the ongoing implementation of the Recovery and Resilience Plan.

On the external front, Portugal’s situation is favorable due to its inclusion in the Eurozone and consistent current account surpluses. However, the study warns that “its status as an international debtor acts as a constraint on its credit rating”, as its net international investment position (-76% in 2023) still reflects the macroeconomic imbalances from the 2008 crisis. Therefore, EthiFinance Ratings notes that Portugal’s high level of external debt remains a concern, leaving the country vulnerable to external shocks”.

On the other hand, the Portuguese banking sector is in a strong position, “with solid capitalization and a CET1 ratio of 17.1% in 2023”, and a reduction in the non-performing loan (NPL) ratio, despite the ECB’s stringent monetary policy, which have benefited Portuguese institutions, with the return on assets (ROA) rising from 0.7% in 2022 to 1.5% in the first half of 2024. However, the report states that “these strengths are counterbalanced by the risks of credit overheating”, which, along with limited international influence and a GDP projection that remains below its potential, exert downward pressure.

In the ESG policy domain, the favorable assessment is supported by Portugal’s solid institutional framework and high governance standards, as well as a high level of social well-being. However, the study warns that “the ESG assessment is constrained by the environmental pillar”, which faces certain risks, especially regarding the green transition, as the country still presents high CO2 emissions levels.

Regarding social policies, the report highlights that “income and gender inequality slightly weaken Portugal’s social profile”. In 2023, the country recorded a Gini Index of 33.7 compared to 32 in 2022, influenced by the rising cost of living. Furthermore, gender disparities persist, with a 15.3 percentage point gap in employment between men and women during the same period, and EthiFinance Ratings points to rising housing prices as a significant challenge.

In terms of governance, the study underscores that “Portugal’s institutional quality and government effectiveness are high”, as demonstrated by the successful implementation of structural measures that have helped the country recover from the 2010 debt crisis. However, the report points to some persistent risks, such as the significant bureaucracy faced by businesses and the lingering presence of corruption, “which can discourage investment and erode trust in institutions”.

The Request for Comments period was launched on the 22th of July 2024 and was closed on 31st of August of 2024.

The Request for Comments affected the future EthiFinance Ratings’ DIF Rating Methodology. During this period no comments were received.