- 20 Dec 2013 at 4:37 PM
Unlike mortgage-backed securities, supranational political entities simply cannot have this many sub-prime components and expect to keep its triple-A rating, according to S&P’s flawless debt-rating system.
Credit-ratings firm Standard & Poor’s cut the outlook for the European Union’s debt on Friday, warning of a decline in the creditworthiness of the bloc’s 28 member states and of increasingly acrimonious talks over a common budget.
The move comes just weeks after S&P stripped the Netherlands of its coveted triple-A credit rating, and cut France’s rating for a second time in two years.
“We believe the financial profile of the EU has deteriorated, and that cohesion among EU members has lessened,” S&P said in a statement as it downgraded the bloc’s rating to double-A-plus from triple-A.
Now, S&P shall turn its unerring eye south.
Standard & Poor’s raised Mexico’s credit rating Thursday on expectations that the recent passage of a bill to allow private investment in the state-run energy sector will increase the country’s growth over time.
The ratings firm raised Mexico’s investment-grade sovereign rating to triple-B-plus from triple-B, bringing it in line with the ratings of Moody’s Investors Service and Fitch Ratings. S&P had lowered Mexico’s rating one notch during the 2009 recession.
Should all of this be making it hard for you to find top-rated debt for your loved ones’ stockings, take heart: The folks in Basel are working hard to ensure that there will be plenty of new securitizations that people can pay S&P to give a triple-A rating by next holiday season.
The European Central Bank, the Bank of England and the EU’s European Commission have called for action to revive securitization to encourage long-term investments, but using stricter standards….
The Bank is considering how it could intervene to kick-start the market.
The Basel Committee of banking supervisors from nearly 30 countries published revised draft rules on securitization on Thursday that included more flexibility.
In the original draft, it proposed a minimum risk weighting of 20 percent for securitized products but in its latest paper it now proposes a minimum of 15 percent, meaning banks would have to set aside less capital against the products.
- S&P: EU Bonds Way Riskier Than 2007-Vintage Securitizations December 20, 2013
- Metro North Rider Follows The 150 Second Rule July 29, 2014
- Morgan Stanley Has A Treat For Senior Junior Bankers July 29, 2014
- Opening Bell: 07.30.14 July 30, 2014
- Let's Talk About: CFA Results July 29, 2014
- Wall Street Realizing That Argentina May Be Just As Irrational As It Seems July 29, 2014
- The Sky May Actually Be Falling July 29, 2014
- Local Man Wants Credit (And More) For Almost Selling Most Expensive House In U.S. History July 29, 2014
- Argentina Decides Talking To Paul Singer Maybe Not Worse Than Defaulting At Midnight July 30, 2014
- Brian Moynihan Imposing His Own Sanctions On Russia July 30, 2014
- Executive Editor
- Bess Levin
How Can We Help You?
- Send tips to:
- For tech issues email:
- For advertising or events email:
- For research or custom solutions email:
- Dealbreaker is published by Breaking Media.
For a full list of our sites, services and staff visit breakingmedia.com