Tags: S&P | Downgrade | France

S&P Says It Did Not Downgrade France, Affirms AAA

Thursday, 10 Nov 2011 12:44 PM

Standard & Poor’s said a message was erroneously sent out today to some of its subscribers suggesting France’s top-notch credit rating had been lowered. It affirmed France’s AAA rating.

“As a result of a technical error, a message was automatically disseminated today to some subscribers of S&P’s Global Credit Portal suggesting that France’s credit rating had been changed,” S&P said in a statement. “The ratings on Republic of France remain ‘AAA/A-1-plus’ with a stable outlook, and this incident is not related to any ratings surveillance activity. We are investigating the cause of the error.”

The yield on France’s 10-year government bond jumped 27 basis points to 3.45 percent. The additional yield demanded by investors to hold 10-year French bonds instead of similar-maturity benchmark German bunds jumped 21 basis points to 1.67 percentage points, a euro-era high.

The European Union today predicted that the French economy will grow more slowly next year than President Nicolas Sarkozy projects and called for “close vigilance” on the nation’s budget deficit.

The European Commission also said that France’s debt burden will climb to about 92 percent of gross domestic product in 2013, including the support it’s giving to other European countries and to its banks.

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