S&P Warns Over Euro-Area Bond ‘Weakest Link’ Effect

Standard & Poor’s Managing Director of European Sovereign Ratings Moritz Kraemer said the rating of a common euro-area bond would reflect that of the “weakest” country if severally guaranteed.

“If it is a several and not a joint guarantee, then it would be the weakest link approach,” Kraemer said at a conference in Alpbach, Austria, adding that “it depends on how the euro bond would be structured.”