Fitch Cuts European Rescue Loan Fund to AA+

Fitch Ratings has cut its credit grade for the European fund that provides rescue loans to Greece, Ireland and Portugal.

The agency said Monday it lowered the rating for the European Financial Stability Facility (EFSF) by one notch from AAA to AA+ as a result of its downgrade of France last week. The EFSF’s creditworthiness depends on that of the countries that provide its financing, which includes France.

“Following the downgrade of France’s IDR (issuer default rating), the EFSF’s long-term debt issues are not fully covered by ‘AAA’ guarantees and over-guarantees and, for debt issued before October 2011, by the cash reserve,” Fitch said in a statement.
Monday’s downgrade of the EFSF means the fund could have to pay higher interest rates to raise money. Fitch’s rivals Standard & Poor’s and Moody’s have already downgraded it.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza
Alfonso Esparza

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