Credit FAQ: Factors Behind Standard & Poor's Ratings Services Placement Of Eurozone Governments On CreditWatch

Standard & Poor's Ratings Services today placed its long-term sovereign ratings on 15 members of the European Economic and Monetary Union (EMU or eurozone) on CreditWatch with negative implications. We now think that there is at least a one-in-two chance that we will lower each of the ratings that we have placed on CreditWatch.

We have also maintained the CreditWatch negative status of our long-term rating on Cyprus and placed its short-term ratings on CreditWatch with negative implications. The CC/Negative/C ratings on Greece have not been placed on CreditWatch.

WHAT PROMPTED THE CREDITWATCH PLACEMENTS?

In our view, systemic stress in the eurozone has risen in recent weeks and reached such a level that a review of all eurozone sovereign ratings is warranted.

We believe that this systemic stress emanates from five interrelated factors. We also believe that these factors influence the creditworthiness, in varying degrees, of all the members of the eurozone.

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