Moody's: French rating safe for now

Jan. 16, 2012 at 1:08 PM
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PARIS, Jan. 16 (UPI) -- Credit rating agency Moody's Investors Service said France's AAA credit rating was safe for now, but it was still reviewing the country's finances.

Stock markets in Europe were stable Monday, although investors were still digesting Friday's news that Standard & Poors Inc. had downgraded France from its pristine AAA rating, Radio France Internationale reported.

The downgrade, especially if it is followed by downgrades at S&P or Fitch's, has the potential to jeopardize the President Nicolas Sarkozy's prospects for re-election.

A bond auction of short-term notes Monday was met with adequate demand. A more convincing test of investor confidence will come Thursday, when France attempts to auction up to $12 billion in bonds set to mature in two to 28 years.

Low demand will push yields higher, indicating low investor confidence and higher costs for the French government.

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