S&P maintained its outlook on Germany at stable, citing the nation’s “highly diversified and competitive economy” as well as the government’s track record for “prudent fiscal policies.” The company expects an orderly resolution of the “simmering debt crisis” in parts of the euro area, it said today in a statement.
Bond markets often disregard rating and outlook changes. France’s 10-year yield, which was 3.08 percent when S&P removed its top rating in January 2012, tumbled to a record 1.66 percent last year. The rate was at 2.57 percent at the market close yesterday.
From the start of this year, S&P, with DBRS Inc., Fitch Ratings and Moody’s Investors Service, had to release announcement schedules for ratings decisions under European Union rules introduced in the wake of the region’s debt crisis. Assessors will be restricted to three judgments per year on sovereign borrowers that haven’t asked or paid for a grade, and will need to review ratings at least every six months.
Under the rules, the rating firms have to notify issuers of their new level at least one full working day before the announcement. Publication of sovereign ratings will only be allowed on Fridays, either after markets close, or at least one hour before trading starts in the EU. Moody’s is scheduled to give a verdict on Portugal today.
Germany, together with the Netherlands and Luxembourg, had the outlook for its Aaa credit rating lowered to negative by Moody’s Investors Service in July 2012. It’s graded AAA at Fitch.
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