The Netherlands is now less creditworthy than Microsoft - by Jason Karaian

Standard and Poor’s stripped the Netherlands of its AAA credit rating today. This ignominy means that the Dutch, now rated merely AA+, are considered less creditworthy than the Germans, on a par instead with the Americans.Although considered part of the euro zone’s sturdy northern “core,” the Dutch economy has performed more like the wobbly southern “periphery” recently, with GDP set to shrink by 1.2% this year, according to S&P. The size of the Dutch economy won’t surpass its 2008 peak until 2017, reckons the ratings agency. Future growth will be weighed down by aggressive government austerity and falling house prices.

S&P also cut France’s rating earlier this month, to a notch below the Netherlands. Economist Holger Sandte of Nordea bank expects a gradual convergence of ratings among euro members, driven by French and Dutch-style downgrades rather than upgrades of lower-rated countries; Germany, Luxembourg and Finland are now the only members of the 17-nation euro zone with the top rating from all three leading credit agencies. S&P upgraded its outlook for Spain today, to “stable” from “negative,” but left its BBB- rating in place.

Not that any of this really matters. For widely held, extensively scrutinized bonds like those issued by the Dutch government, the opinion of one ratings agency doesn’t move markets much; Fitch and Moody’s, the other two big agencies, still give the Netherlands the top grade. Dutch bond spreads barely budged on the downgrade news, and continue to fetch lower yields than fellow AA+ rated America (as does AA rated France, for that matter). 

Read more in Akmere-Digest

France's Credit Rating Change Not Imminent, Moody's Says - by Mark Deen

France’s sovereign credit rating may not be subject to an imminent change, Moody’s Investors Service said. 

Moody’s placed France on “negative outlook” on Feb. 13, adding that it retains its Aaa credit rating. Socialist presidential candidate Francois Hollande said yesterday that he expects Moody’s to act on that outlook on May 12, six days after the final round of this year’s presidential election.

“The negative outlook on this rating doesn’t signal any imminent change but constitutes an indication of the probable evolution in the next 12 to 18 months,” Moody’s said today in an e-mailed statement in response to Hollande.

For more: France's Credit Rating Change Not Imminent, Moody's Says - Businessweek

Slovenia Ratings Cut by Moody’s on Concern Nation’s Banks May Need Funding - by John Detrixhe and Boris Cerni

Slovenia had its credit rating lowered one step to A1 by Moody’s Investors Service on the potential need for the government to support its banking system amid Europe’s debt crisis.

The euro-area nation’s banking industry has assets that are about 136 percent of gross domestic product, which is “relatively large when compared to other systems in eastern Europe,” Moody’s said yesterday in a statement. It assigned a negative outlook to Slovenia’s credit grade, the fifth-highest. Standard and Poor’s ranks the nation AA-, one level higher.

For more: Slovenia Ratings Cut by Moody’s on Concern Nation’s Banks May Need Funding - Bloomberg

France’s AAA Credit Affirmed by S&P, Moody’s - b John Detrixhe and Anchalee Worrachate

France’s top credit grade was affirmed by Standard & Poor’s, Moody’s Investors Service and Fitch Ratings as relative yields on the nation’s debt climb on concern that Europe’s sovereign debt crisis is intensifying.

The outlook on France is stable and its AAA ranking is “warranted,” Moritz Kraemer, S&P’s managing director of European sovereign ratings, said today in a Bloomberg television interview. Francesco Meucci, a spokesman for Moody’s, said in a telephone interview the country’s Aaa grade is “stable.” Fitch spokesman Brian Bertsch said France is rated AAA with a stable outlook as per its May 31 statement.

For more: France’s AAA Credit Affirmed by S&P, Moody’s - Bloomberg

US lawmakers, media say Standard & Poor rating downgrade 'a wake-up call'

Standard & Poor's cut the US credit rating for the first time in history on Friday, saying the country's politicians are increasingly unable to come to grips with its massive fiscal deficit and debt load. S&P cut the US rating from its top-flight triple-A one notch to AA+, and added a negative outlook, saying it could be further downgraded in two years if progress is not made in cutting the huge government budget gap.


It was the first time the US was downgraded since it received an AAA rating from Moody's in 1917; it has held the S&P rating since 1941.

Top US lawmakers late on Friday expressed concern about Standard & Poor's decision to cut the US credit rating, saying it was "a wake-up call" for a nation saddled with a debt exceeding $14 trillion.

Senate Democratic majority leader Harry Reid said "the action by S&P reaffirms the need for a balanced approach to deficit reduction that combines spending cuts with revenue-raising measures like closing taxpayer-funded giveaways to billionaires, oil companies and corporate jet owners."

For more: US lawmakers, media say rating downgrade 'a wake-up call' - Hindustan Times

US Economy - Government Debt Might Reduce U.S. Triple AAA Credit Rating, Warn S&P, Moody’s Credit Rating Agencies | Staho.com

On Thursday two major credit rating agencies, Standard & Poor’s and Moody’s Investors Service, warned that the U.S. might lose its triple AAA credit rating if its government debt Keeps growing.
The two separate statements, made within hours of each other, were seized as further evidence that the U.S. must reduce spending and debt to avoid disaster.

On the other hand, many economists say the reckoning, if there will be one, is still years or even decades away. The bond market was not affected by Thursday’s news. However, while some experts who want to see the deficit reduced argue now is not the time to cut federal spending given the weak economy and high unemployment, others fear the mounting government debt.

In a quarterly report on the nation’s credit risk, Moody’s Investors Service said the probability of revising is outlook on its triple AAA rating for the United States – from stable to negative – within the next couple of years is increasing. This would not actually reduce the credit rating, but even a small revision would likely rattle financial markets and might even limit America’s ability to borrow the money necessary for financing its deficit. Moody’s has been rating U.S. government debt since 1917, and has always rated it triple AAA.

For more: Government Debt Might Reduce U.S. Triple AAA Credit Rating, Warn S&P, Moody’s Credit Rating Agencies | Staho.com