Moody’s Affirms Rating for Europe’s Temporary Bailout Fund
Moody’s Investors Service affirmed its top credit rating for Europe’s temporary bailout, citing the creditworthiness of the fund’s biggest contributors even after the company issued a series of downgrades.
The European Financial Stability Facility kept its Aaa rating along with a stable outlook, Moody’s said in a statement early today. The EFSF outlook rests on the creditworthiness of Germany, the Netherlands, Finland and Luxembourg after downgrades in Spain, Italy and four others, Moody’s said.
“Although the recent actions on the ratings of some of the EFSF’s guarantors weaken the quality of the facility’s guarantor pool,” Moody’s said its decision “is driven by the fact that no Aaa-rated country has lost its top-notch rating.”
The move contrasts with Standard & Poor’s downgrade of the EFSF last month after the credit company revoked the AAA-rating of France and Austria. EFSF Chief Executive Officer Klaus Regling said at the time that S&P’s downgrade wouldn’t affect the fund’s 440 billion-euro ($580 billion) lending capacity.
Moody’s cut the debt ratings of six European countries and said it may strip France and the U.K. of their top ratings, citing the debt crisis. Spain was downgraded to A3 from A1, Italy to A3 from A2 and Portugal to Ba3 from Ba2. Slovakia, Slovenia and Malta also had their ratings lowered.
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