Moody's Investors Service lowered the rating of Eurozone's rescue fund, European Stability Mechanism to Aa1 from Aaa and maintained negative outlook.
The latest move was driven by the downgrade of France, which remains the second largest contributor after Germany, to the financial resources of ESM.
The provisional long-term rating for the issuer rating and debt issuance programme of the European Financial Stability Facility (EFSF) were downgraded to (P)Aa1 from P(Aaa).
Moody's downgrade of France reflects the rating agency's view that there has been a marginal diminution in the certainty that the sovereign will fulfill its financial obligations.
According to Moody's estimate, there is a high correlation in credit risk among the supporters of ESM and EFSF. The negative outlook on the ESM's rating reflects the negative outlooks on the ESM member states with significant capital contribution keys and high ratings.
by RTT Staff Writer
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