With 10-year bond yields under 2% for much of the eurozone, and with inflation sliding into deflation, it is impossible to not notice when the ratings agencies actually upgrade a European nation. That is particularly true of the PIIGS (Portugal, Italy, Ireland, Greece, Spain), which in this case is an upgrade for the Republic of Ireland by Standard & Poor’s on Friday. The good news here is that this includes upgrades for the Bank of Ireland (NYSE: IRE) as well.

The iShares MSCI Ireland Capped (NYSEMKT: EIRL) ETF was up 0.7% at $36.15, against a 52-week trading range of $30.86 to $41.12. It has net assets of only $91 million.

Ireland’s sovereign long-term rating was raised to A from A- by S&P on Friday. The prior Positive outlook was revised to Stable. This is important in that it might mean the upgrade will be the last one for a while, unlike if the rating outlook had remained Positive. The short-term sovereign rating was raised to A-1 from A-3 in the call.

On top of the upgrade, S&P now projects Ireland’s gross domestic product (GDP) growth to rise to 3.7% in 2014 to 2016 from a prior estimate of 2.7%. S&P pointed out that the National Asset Management Agency has effectively repaid about half of its original government guaranteed senior bonds. S&P sees Ireland’s financial system assets being largely on the mend, even against the prevailing downside risks from eurozone trading partners.

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As far as the Bank of Ireland, S&P also raised its rating to A from A- on Friday. Moody’s had raised its rating on Bank of Ireland back in November, but Moody’s view on the bank’s senior debt ratings went up to Ba1 from Ba3, and its deposit ratings to Baa3 from Ba2 in the call. The point is that S&P’s view is now above that of Moody’s, at least on the surface.

The Bank of Ireland American depositary shares (ADSs) trading in New York were already positive on the day, but the ADSs were up 3% at $17.07 at noon, against a 52-week range of $13.20 to $22.00.

The New Ireland Fund Inc. (NYSE: IRL) is a closed-end mutual fund rather than an exchange traded funds, and it tracks Ireland but with thinner trading volume in New York. Its gain right at noon was 1.3% to $13.26, and that is against a 52-week trading range of $10.95 to $14.78. The fund has only $76.9 million in net assets.

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