Posted on 01/16/2012 3:17:11 PM PST by Olog-hai
BRUSSELS—The Eurozone's bailout fund was downgraded by one notch to AA+ by the US ratings agency Standard & Poor's on Monday (16 January)—a move likely to put an extra financial burden on contributing nations, many of whom were themselves downgraded last week.
Designed to fund the rescue packages for Greece, Ireland and Portugal, the European Financial Stability Facility (EFSF) owed its triple A rating to guarantees from eurozone countries, two of which—France and Austria—saw their own top rating cut by one notch on Friday, along with other countries further down the ratings ladder.
“The EFSF’s obligations are no longer fully supported either by guarantees from EFSF members rated AAA by S&P, or by AAA rated securities. Credit enhancements sufficient to offset what we view as the reduced creditworthiness of guarantors are currently not in place,” Standard & Poor's said in a statement.
The move is likely to lower the firepower of the fund, unless contributing countries step up their loan guarantees to the facility. …
(Excerpt) Read more at euobserver.com ...
I hadn’t seen this story. Thank you very much for posting it.
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