S&P Downgrades the European Rescue Fund
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Standard & Poor's lowered its rating on the European Financial Stability
Facility (EFSF) one notch Monday from 'AAA' to 'AA+', which follows last week's downgrade of nine Eurozone countires, including France and Austria.
S&P said the EFSF's obligations are no longer fully supported either by guarantees from EFSF members rated 'AAA' by Standard & Poor's, or by 'AAA' rated securities. "We consider that credit enhancements sufficient to offset what we view as the reduced creditworthiness of guarantors are currently not in place."
The outlook is developing, which reflects that the firm could raise the EFSF's long-term rating to 'AAA' if they see that additional credit enhancements are put in place, but also the likelihood that they could lower the rating further if they conclude that the creditworthiness of the EFSF's members will likely be further reduced over the next two years.
Facility (EFSF) one notch Monday from 'AAA' to 'AA+', which follows last week's downgrade of nine Eurozone countires, including France and Austria.
S&P said the EFSF's obligations are no longer fully supported either by guarantees from EFSF members rated 'AAA' by Standard & Poor's, or by 'AAA' rated securities. "We consider that credit enhancements sufficient to offset what we view as the reduced creditworthiness of guarantors are currently not in place."
The outlook is developing, which reflects that the firm could raise the EFSF's long-term rating to 'AAA' if they see that additional credit enhancements are put in place, but also the likelihood that they could lower the rating further if they conclude that the creditworthiness of the EFSF's members will likely be further reduced over the next two years.
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