S&P downgrades creditworthiness of eurozone bailout fund one notch to AA+, says it could upgrade fund back to AAA if eurozone offers new credit enhancements
January 16, 2012
– Rating agency Standard & Poor's says it has downgraded the creditworthiness of the eurozone's bailout fund by one notch to AA+.
The downgrade, which follows ratings cuts for AAA-rated France and Austria, could hurt the European Financial Stability Facility's ability to raise cheap bailout money.
While most euro countries guarantee the bonds issued by the EFSF, its rating depends on the AAA-countries. The remaining four do not make up enough guarantees to secure the fund's euro440 billion lending capacity.
S&P said it could upgrade the EFSF back to AAA, if the eurozone offers new credit enhancements.
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