Zehavya blog

S&P says no plans to cut U.S. rating in medium term

MOSCOW (Reuters) – Ratings agency Standard & Poor's does not have any plans to downgrade the U.S. sovereign debt rating, but it believes credit risk may increase in the long term, a senior official at the agency said on Thursday.

Moody's Investors Service warned a week ago that a lack of U.S. government action on the budget deficit increased the likelihood of it assigning a negative outlook to the country's top AAA credit rating.

"We have a stable outlook so don't expect a downgrade in the short- to medium-term on the U.S., not from Standard & Poor's in any case," said Scott Bugie, S&P's managing director for financial institutions.

On the same day as Moody's warned about the U.S. rating last week, S&P cut Japan's credit rating for the first time since 2002, saying Tokyo had no plan to deal with its mounting debt.

Bugie said the United States faced similar but less pronounced credit risks.

"The issues are similar to other countries, including Japan, but not in our opinion as pronounced as in Japan," he told journalists at the Troika Dialog investment conference in Moscow.

"It looks like there will be a slow but continual build of credit risk from what we view as excellent credit risk to what may not be as excellent... but in our view it is not a fast moving issue."

(Reporting by Antonina Vorobyova; Writing by Conor Humphries; Editing by Melissa Akin and Patrick Graham)