Credit ratings agency Moody's has given the European Financial Stability Facility (EFSF) 10-year €3bn benchmark bond an Aaa rating.
Credit ratings agency Moody’s has given the European Financial Stability Facility (EFSF) 10-year €3bn benchmark bond an Aaa rating.
Moody’s said the creditworthiness of the AAA-rated euro area member states and ‘firm commitment’ to the EFSF were the main reasons behind the strong rating.
The programme’s over-guarantee mechanism ensures the EFSF’s obligations to pay interest to bondholders are fully covered by guarantees from those member states.
However, the agency warned the rating would be sensitive to changes in the ratings for countries contributing the largest amounts to the EFSF – Germany, France and the Netherlands- and their commitment to the facility.
The bond will be used to provide financial assistance to Ireland.
This article first appeared on Investment Week