Moody’s warns of spillover if US downgraded
June 30, 2011 @ 8:51 am
WASHINGTON - Moody's said Wednesday that the ratings of US government-related firms, municipal bond issuers and even private firms could be hit if the Washington defaults on debt payments in August.
The agency reiterated that if the country's $14.29 trillion debt ceiling is not raised by August 2, the government could default on debt payments and would see its top grade Aaa debt rating erode, either with a negative warning or an outright downgrade.
It said that, in that case, government-controlled debt issuers like mortgage backers Fannie Mae and Freddie Mac would see their ratings equally downgraded...