Ratings agency Standard and Poor's (S&P) has downgraded the creditworthiness of the European Union bailout fund, the European Financial Stability Facility, by one notch to AA+.
S&P said the decision was the result of downgrades to France's and Austria's ratings from AAA since they served as top-level guarantors of the European Financial Stability Facility.
Standard & Poor's downgraded nine eurozone governments on January 13.
Most eurozone countries are guarantors of the bonds issued by the EFSF, but the fund's rating depends on the AAA-countries. The remaining four AAA-rated countries -- Germany, the Netherlands, Finland, and Luxembourg -- do not make up enough guarantees to secure the fund's 440 billion-euro lending capacity.
The downgrade could hurt the EFSF's ability to raise money at low costs.
S&P however said it could restore EFSF's top AAA ranking if the eurozone offered new credit guarantees.
The decision came as European Central Bank head Mario Draghi said it was time for investors and regulators to rely less on ratings agencies.
Draghi, speaking in Frankfurt, noted that downgrades had largely been anticipated by markets.
compiled from agency reports
S&P said the decision was the result of downgrades to France's and Austria's ratings from AAA since they served as top-level guarantors of the European Financial Stability Facility.
Standard & Poor's downgraded nine eurozone governments on January 13.
Most eurozone countries are guarantors of the bonds issued by the EFSF, but the fund's rating depends on the AAA-countries. The remaining four AAA-rated countries -- Germany, the Netherlands, Finland, and Luxembourg -- do not make up enough guarantees to secure the fund's 440 billion-euro lending capacity.
The downgrade could hurt the EFSF's ability to raise money at low costs.
S&P however said it could restore EFSF's top AAA ranking if the eurozone offered new credit guarantees.
The decision came as European Central Bank head Mario Draghi said it was time for investors and regulators to rely less on ratings agencies.
Draghi, speaking in Frankfurt, noted that downgrades had largely been anticipated by markets.
compiled from agency reports