Oct. 21 (Bloomberg) -- Fitch Ratings has no plans to change France’s AAA credit rating, according to David Riley, the company’s head of sovereign ratings.
“Our rating is AAA, our stable outlook indicates we don’t have any plans to change that rating,” Riley said in an interview at the AFME European Government Bond Conference in Brussels today. “We don’t think the changes to the EFSF put France’s AAA at risk,” he said, referring to the European Financial Stability Facility bailout fund.
The yield premium investors demand to hold French government 10-year bonds rather than similar-maturity German debt has soared this month on mounting concern that contagion from the sovereign debt crisis has leeched into Europe’s larger economies. The spread was at 113 basis points at 2:38 p.m. London time, from 71.5 basis points at the end of September.
Even so, Riley said France faces the challenges of “bringing the budget deficit down, stabilizing the level of public debt and, like the U.K. and the U.S., the room for maneuver that France has on public finances is diminishing.”
A Standard & Poor’s report today said France is among euro-region sovereigns likely to be downgraded in the event of a stressed economic scenario. Moody’s Investors Service earlier said the nation’s ranking was under pressure.
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