JUPITER, Florida (September 7, 2011) -- Weiss Ratings, an independent rating agency of U.S. financial institutions and sovereign debts, has downgraded the debt of Austria, Belgium, Czech Republic, Finland, Switzerland and Turkey.
The changes in the ratings are as follows:
Weiss Sovereign Debt Ratings
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Weiss Ratings scale: A = excellent, B = good, C = fair, D = weak, E = very weak; plus and minus signs = top and bottom of grade ranges.
The rating downgrades reflect the effect of the financial crisis on Europe and its expansion beyond the PIIGS countries (Portugal, Italy, Ireland, Greece and Spain). Since April, all six European nations have witnessed deterioration in financial market stability and other factors, with the most significant declines occurring in Austria and the Czech Republic.
Turkey, a candidate to join the European Union (EU), is also impacted given the proximity and business links to EU nations now coming under growing pressure; while Switzerland, despite its attempts to distance itself, is also feeling the effect due to the rush to safe-haven currencies like the Swiss franc and recent measures it has been forced to take to defend itself.
The generally declining economic health experienced by the majority of the countries in Europe has also affected Finland and Belgium.
Weiss Ratings senior financial analyst Gavin Magor commented: “As the European financial contagion expands beyond the obvious candidates, other nations must implement severe austerity measures or face higher borrowing costs demanded by bond investors.”
Separately, Weiss maintains and reaffirms its C- rating for the long-term debt of the United States, reflecting metrics in three negative areas (heavy debt burdens, an unstable economy and poor international accounts) plus those in one positive area (continuing strong market acceptance for its debt.)
On the Weiss Ratings scale, which ranges from A (excellent) to E (very weak), a C- rating is the approximate equivalent of a BBB- on the scales used by other credit rating agencies, or approximately one notch above speculative grade (junk).
For the Weiss Sovereign Debt Ratings on all 49 countries covered, click here. For more information on the Weiss Ratings approach, refer to our white paper, "Introducing The Weiss Sovereign Debt Ratings."
About Weiss Ratings
Weiss Ratings, the nation's leading independent provider of financial strength ratings on banks, credit unions, insurance companies as well as sovereign debt ratings on 49 countries, accepts no payments for its ratings from rated entities. By adhering to its independent business model, Weiss outperformed Standard and Poor's, Moody's, A.M. Best and Duff & Phelps (now Fitch) in warning of future life and health insurance company failures according to a 1994 study by the U.S. Government Accountability Office (GAO), while also outperforming its competitors in identifying the safest insurers, according to its follow-up study using the GAO's research methodology. Similarly, Weiss was the only one to identify, in advance, nearly all major banks that failed or required a federal bailout in the 2008-2009 debt crisis.