Weiss Ratings Downgrades Six European Countries;
Reaffirms Low U.S. Debt Rating
by Weiss Ratings | September 7, 2011
There’s a financial crisis in Europe and it isn’t going away anytime soon.
Instead the deterioration in financial market stability is expanding beyond the PIIGS countries (Portugal, Italy, Ireland, Greece and Spain) we’ve been hearing so much about.
And now, Weiss Ratings, an independent rating agency of U.S. financial institutions and sovereign debts has just downgraded the debt of Austria, Belgium, Czech Republic, Finland, Switzerland and Turkey.
The changes in the ratings are as follows:
Weiss Sovereign Debt Ratings |
Country |
New
Rating |
Prior
Rating |
| Austria |
C+ |
B+ |
| Belgium |
C- |
C |
| Czech Republic |
C |
C+ |
| Finland |
C- |
C |
| Switzerland |
B+ |
A- |
| Turkey |
C- |
C |
© 2011 Weiss Ratings. All rights reserved.
Weiss Ratings scale: A = excellent, B = good, C = fair, D = weak, E = very weak; plus and minus signs = top and bottom of grade ranges.
Since April, all six European nations have witnessed deterioration in financial market stability and other factors with the most significant declines occurring in Austria and the Czech Republic.
Turkey, a candidate to join the European Union (EU), is also impacted given the proximity and business links to EU nations now coming under growing pressure. While Switzerland, despite its attempts to distance itself, is also feeling the effect due to the rush to safe-haven currencies like the Swiss franc and recent measures it is has been forced to take to defend itself.
The generally declining economic health experienced by the majority of the countries in Europe has also affected Finland and Belgium.
Weiss Ratings senior financial analyst Gavin Magor commented: “As the European financial contagion expands beyond the obvious candidates, other nations must implement severe austerity measures or face higher borrowing costs demanded by bond investors.”
Separately, Weiss reaffirmed its C- rating for the long-term debt of the United States, reflecting metrics in three negative areas: heavy debt burdens, an unstable economy and poor international accounts. And, reflecting one positive area which is the continuing strong market acceptance for U.S. debt.
On the Weiss Rating scale, which ranges from A (excellent) to E (very weak), a C-rating is the approximate equivalent of a BBB- on the scales used by other credit rating agencies or approximately one notch above speculative grade (junk).
For the Weiss Sovereign Debt Ratings on all 49 countries covered, click here. For more information on the Weiss Ratings approach, read the white paper, “Introducing The Weiss Sovereign Debt Ratings.”