New York Stock Exchange (NYSE) in New York, USA, Tuesday, March 28, 2023.
Victor J. Blue | Bloomberg | Bloomberg | Getty Images
Scope Ratings on Friday put its U.S. AA long-term issuer and senior unsecured debt local and foreign currency ratings under review for possible downgrades due to long-term risks related to the misuse of debt ceiling instruments. .
Scope, considered Europe’s leading credit rating agency, said the recurring debt ceiling crisis has put the U.S. government through a difficult phase of debt repayment, with the government going to great lengths to ensure its repayment. It added that it would depend on the actions of Congress. Pay off your debt in full and on time.
Increased political polarization following the November 2022 parliamentary elections, government fragmentation, and rising federal deficits over the next few years are also reasons Scope cited in its rating review.
US government strike The $31.4 trillion borrowing limit in January amid a conflict between the Republican-controlled House and President Joe Biden’s Democrats.
The US could run out of money to pay the bill as early as June 1 if Congress doesn’t raise the debt ceiling, according to Treasury Secretary Janet Yellen.
Last week, the Republican-led U.S. House of Representatives passed a bill that combined $4.8 trillion in spending cuts and a higher ceiling. But Biden and his fellow Democrats say Congress should raise the cap unconditionally.
Scope has also put the US short-term local and foreign currency issuer ratings under consideration for a downgrade to S-1+.
Rating agencies Moody’s and Fitch both have triple-A ratings in the United States. This is the highest credit status they can assign to borrowers.
S&P Global’s sovereign rating for the United States is ‘AA+’, the agency’s second highest rating. In a report published last March, S&P predicted that Congress would continue to raise or suspend the debt ceiling despite “political dichotomy” between the executive and legislative branches of government.
Scope Ratings joins Standard and Poor’s, Moody’s, Fitch and DBRS in continuing negotiations with the European Central Bank to become one of the Approval Agencies.
