In addition to the US government, five large insurers, several US states and hundreds of their municipalities have also had ratings lowered
Standard & Poors (S&P) stripped the US of its top credit rating on August 5 and many more downgrades have followed.
Five large insurers, several states and hundreds of municipalities have also had their ratings lowered, according to The New York Times.
In a statement that appeared on Reuters S&P said that its “ratings of 744 structured finance transactions remain on CreditWatch negative following the lowering of the long-term credit rating on the United States of America.” This is due to due to their exposure to the sovereign credit risk of the US.
As the debt crisis continues to develop it is likely that the amount of credit available for companies will decrease. “I think that with the financial crisis, the European debt crisis and the establishment of Basel 3 businesses will have difficulty finding counterparty financing,” said Gilbert Canameras, Director of Risks and Insurance at Eramet & president of AMRAE.
Risk managers need to be aware of how their companies’ credit lines will be affected by the debt crisis and the implications that this will have on business continuity.
See the map below for S&P's world ratings.
