por admin » Mié Dic 07, 2011 11:48 am
MARKETSDECEMBER 7, 2011, 3:49 P.M. ET.S&P Puts Downgrade Sights on EU, Big Banks
By JOAN E. SOLSMAN And DREW FITZGERALD
The European Union and some of the largest banks in the euro zone were added to Standard & Poor's list of entities on watch for possible downgrade.
Standard & Poor's Ratings Services also put a swath of European local and regional governments and public-finance entities on watch for possible downgrade, including the cities of Paris, Rome and Vienna.
S&P said the moves, which come after the credit-rating firm took similar action on most euro-zone member countries earlier this week, were taken because the countries that use the euro directly contribute about 62% of the EU's total budgeted revenue this year, putting the union's triple-A rating at risk. The U.K. and Denmark are among the EU nations that don't use the euro.
S&P said its review will focus the ability of the euro zone's member states to support the EU's overall debt service should the institution face financial distress.
Ratings actions usually take place within 90 days after a credit watch starts, but S&P repeated its intent to reach a decision soon after Friday's regional summit. The ratings service said it would likely downgrade the EU by one notch, if at all.
S&P on Monday placed 15 of the euro zone's 17 countries on watch for downgrade, citing the currency area's deepening political, financial and monetary problems. Greece's status was already very close to default and Cyprus was already on negative watch.
In Wednesday's move, S&P put its credit ratings on some of the largest banks in the euro zone on watch for downgrade and warned it will take similar ratings actions on other large banks soon.
Among the banks under review are BNP Paribas SA, Fortis Bank SA, Commerzbank AG, Credit Agricole SA, Deutsche Bank AG, Intesa Sanpaolo SpA and UniCredit SpA.
S&P said it intends to resolve the credit-watch placements on the banks soon after resolving the ratings on the related sovereigns.
The credit-rating firm said the following groups could be downgraded by one notch, if at all, in line with the rating on their respective sovereign:
• In Austria, the city of Vienna and the states of Tyrol and Upper Austria
• In Belgium, the region of Brussels and the community of Flanders
• In Finland, Municipality Finance PLC and Municipal Guarantee Board, which are Finnish public finance entities
• In Germany, the states of Saxony and Bavaria
S&P said the following groups could be downgraded by up to two notches, if at all, in line with the rating on their respective sovereign:
• In France, the city of Paris as well as the region Ile de France
• In Italy, the cities of Rome, Bologna, Milan, Genoa, Turin, Florence; the province of Rome; the regions of Marches, Sicily, Emilia-Romagna, Liguria, Umbria and Campania; and finally the autonomous region of Friuli-Venezia Giulia
• In Spain, the city and province of Barcelona and the autonomous communities of Aragon, Galicia, the Canary Islands, Madrid and Andalusia
Also in Spain, S&P said the autonomous communities of Basque Country and Navarre and the historical territory of Bizkaiawere were also placed on negative watch but aren't capped by the sovereign rating. Their ratings may be lowered as a result of rising systemic problems in the euro zone, which may prompt the firm to individually reassess their overall links with Spain.