S&P Unlikely To Further Downgrade US Long-Term Credit Rating
By Ria Novosti
The chances are 1 to 3 that rating agency Standard & Poor’s will further downgrade the U.S. long-term sovereign credit rating following the agency’s historic decision to cut America’s top-tire AAA rating, a S&P official said.
Standard & Poor’s downgraded on Friday the United States’ top-notch AAA credit score by one notch to AA-plus for the first time ever, citing concerns about the country’s record budget deficits and rising debt burden. In addition to the downgrade, S&P issued a “negative” outlook for the United States, meaning that further downgrade may follow within the next two years.
“It was our duty to make such a hard and controversial call”, David Beers, global head of S&P sovereign ratings, said, commenting on the agency’s decision.
Analysts say the U.S. top rating downgrade did not come as a surprise as S&P announced in summer that it expected the U.S. authorities to cut the growing budget deficit by $4 trillion while the U.S. Congress’ debt ceiling deal approved last week includes only $2.1-2.4 trillion in savings.
John Piecuch, an S&P official, said the agency always gave a debt issuer the opportunity to review the announcement before it was made.
