French rate cut could hit eurozone rescue funds: Moody's

AFP
November 20, 2012
Moody's was the second of the three major ratings agency to cut France's top rating
<p>A woman holds a placard reading "No austerity, we want happiness" during a demonstration against austerity in Toulouse, France, on November 14. The rating agency Moody's said on Tuesday that it was studying the impact of its cut of France's top credit notation on the triple "A" ratings of eurozone rescue funds that are underpinned in part by France.</p>

The rating agency Moody's said on Tuesday that it was studying the impact of its cut of France's top credit notation on the triple "A" ratings of eurozone rescue funds that are underpinned in part by France.

Moody's ratings of the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM) were under negative watch, implying that they could be downgraded, the agency said in a statement.

Moody's said it would consider in particular whether the support of other countries with "Aaa" ratings was strong enough to justify a continued top rating for the funds as well.

The "Aaa" notation is the highest rating available from Moody's for such instruments.

Eurozone countries that still benefit from the "Aaa" rating include Finland, Germany, Luxembourg and the Netherlands.