S&P Places EFSF Long-Term 'AAA' Ratings on Rating Watch Negative

On Tuesday, S&P Ratings announced ratings on the European Financial Stability Facility at "AAA", however, put the credit rating on a negative watch, which means S&P could move to downgrade the "AAA" in three months or less. On Monday,

of 15 Euro Zone nations on review for possible downgrade. Germany and France, the Euro Zone's two largest economies, could lose their AAA credit ratings. That pair along with 13 other countries are on credit watch negative. Austria, Finland, Luxembourg and the Netherlands are also among the AAA nations that could be downgraded. S&P in the report stated, "Our 'AAA' long- and 'A-1+' short-term ratings on EFSF are based on the unconditional, irrevocable, and timely guarantees from EFSF members rated 'AAA' by Standard & Poor's that support EFSF's obligations (bonds, notes, commercial paper, debt securities, or other financing arrangements) and, the 'AAA' rated securities that constitute EFSF's liquidity reserves. A CreditWatch negative placement indicates that, in the S&P's opinion, there is at least a 50% probability that the EFSF rating could be lowered in the short term. During this conference, U.S. equity markets moved lowed in pre-market trading, however, still positive and has since rebounded slightly.