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Monday, Jan. 23, 2012 - Weekly e-Newsletter & Commentary - Issue No. 495
| Fundamental Analysis: |
| Global Futures |
 Fitch took ratings actions on six Euro-zone sovereigns today, resulting in downgrades of five nations. The downgrades follow the Rating Watch Negative (RWN) placed on the six nations, Spain, Belgium, Italy, Slovenia, Cyprus and Ireland, on December 16, 2011.
Despite the sovereign credit downgrades, the Euro remained to climb against the U.S. dollar. The U.S. dollar remains weak, as investors continue to await news on a Greek deal being reached.
The ratings actions on the long-term (LT) and short-term (ST) Issuer Default Ratings (IDRs) are as follows:
Belgium LT IDR downgraded to 'AA' from 'AA+'; Negative Outlook; ST IDR affirmed at 'F1+'
Cyprus LT IDR downgraded to 'BBB-' from 'BBB'; Negative Outlook; ST IDR affirmed at 'F3'
Ireland LT IDR affirmed at 'BBB+'; Negative Outlook; ST IDR affirmed at 'F2'
Italy LT IDR downgraded to 'A-' from 'A+'; Negative Outlook; ST IDR downgraded to 'F2' from 'F1'
Slovenia LT IDR downgraded to 'A' from 'AA-'; Negative Outlook; ST IDR downgraded to 'F1' from 'F1+'
Spain LT IDR downgraded 'A' from 'AA-'; Negative Outlook; ST IDR downgraded to 'F1' from 'F1+'
In the release, Fitch noted the following rationale for today’s downgrades:
As outlined in its rating review press release of 16 December 2011, Fitch has now considered both systemic and country-specific factors for these six sovereigns. As a result, the agency has reduced the score it assigns to capture financing flexibility in its assessment of the credit profiles of eurozone sovereigns that have large fiscal financing needs and significant financial/economic imbalances.
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