Sunday, August 7, 2011

U.S. Credit Rating Has 1 In 3 Chance Of Future Downgrade - S&P's John Chambers

A Standard & Poor's official says there is a 1 in 3 chance that the U.S. credit rating could be downgraded another notch if conditions erode over the next six to 24 months.

The credit rating agency's managing director, John Chambers, tells ABC's "This Week" that if the fiscal position of the U.S. deteriorates further, or if political gridlock tightens even more, a further downgrade is possible.

Chambers, who serves as chairman of Standard & Poor's sovereign ratings committee, said it may be years before the U.S. recovers its AAA rating, citing examples of countries that took nine to 18 years to get their ratings upgraded after having their credit-worthiness lowered.

And, the head of Standard & Poor's sovereign ratings, David Beers told "Fox News Sunday" he did not expect "that much impact" when global markets open on Monday due to what he called a "mild deterioration" in the U.S. credit standing to AA-plus from top-tier AAA.

He also said the downgrade was not due to the budget positions of any political party and that on any future agreement, "We think credibility would mean any agreement would command support from both political parties."

Beers called the U.S. Treasury Department's criticism of the credit rating agency's analysis a "complete misrepresentation."

Few days back, S&P downgraded the U.S. rating from AAA to AA+, for the first time.

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