PARIS—France hasn't been notified of any potential sovereign-rating downgrade, French government officials said Thursday.
"There is absolutely nothing new," said one official, who spoke on condition of anonymity. The government has "no information in that regard from any credit rating agency whatsoever."
"The rumour of the downgrade is unfounded," said another official. "There is no new information from any rating agency that would point in this direction."
The comments were made as speculation emerged once again among some investors that France may be on the verge of a sovereign-rating downgrade.
The speculation appeared linked to a research note released Wednesday by Citi analysts who said they believed Moody's Investors Service Inc. would put France's triple-A rating "on review for a possible downgrade by the autumn."
French bond yields jumped on the downgrade talk before recovering. The yield on 10-year French bonds rose as high as 3.11% in the wake of the speculation, 0.11 percentage point higher on the day.
The yield differential between French debt and 10-year safe-haven German bunds was 0.14 percentage point wider at 1.5%. But French bonds quickly bounced back. French stocks also dipped into the red before recovering slightly.
The downgrade speculation comes just days ahead of the first round of voting in France's presidential elections, pushing the weak state of the country's public finances further into the spotlight.
Standard & Poor's Corp. stripped France of its triple-A rating in January after a period of rampant speculation and market swings. When the decision was finally announced, the impact was minimal.
Investor focus has returned to France in recent weeks, with analysts and economists voicing concerns that neither of the leading candidates in the election—President Nicolas Sarkozy and Socialist challenger François Hollande—have the policies to reform France and put it on track to meet deficit-reduction targets.
Also, after a brief period of calm in the wake of the European Central Bank's massive injection of liquidity into the banking system, worries over Spain's debt and growth prospects have resurfaced, fueling volatility in European bond markets.
At the beginning of the week there was also confusion over France's triple-A rating when Mr. Hollande said Moody's would decide on France's rating May 12, shortly after the second round of elections May 6.
Moody's, which put a negative outlook on France's triple-A rating Feb. 13, moved quickly to dispel the speculation that built up after Mr. Hollande's comments.
"The negative outlook on this rating does not signal an imminent change in the rating, but constitutes an indication of the likely direction in the 12 to 18 coming months concerning the factors under consideration," Moody's said in a statement Monday.
wsj.com
"There is absolutely nothing new," said one official, who spoke on condition of anonymity. The government has "no information in that regard from any credit rating agency whatsoever."
"The rumour of the downgrade is unfounded," said another official. "There is no new information from any rating agency that would point in this direction."
The comments were made as speculation emerged once again among some investors that France may be on the verge of a sovereign-rating downgrade.
The speculation appeared linked to a research note released Wednesday by Citi analysts who said they believed Moody's Investors Service Inc. would put France's triple-A rating "on review for a possible downgrade by the autumn."
French bond yields jumped on the downgrade talk before recovering. The yield on 10-year French bonds rose as high as 3.11% in the wake of the speculation, 0.11 percentage point higher on the day.
The yield differential between French debt and 10-year safe-haven German bunds was 0.14 percentage point wider at 1.5%. But French bonds quickly bounced back. French stocks also dipped into the red before recovering slightly.
The downgrade speculation comes just days ahead of the first round of voting in France's presidential elections, pushing the weak state of the country's public finances further into the spotlight.
Standard & Poor's Corp. stripped France of its triple-A rating in January after a period of rampant speculation and market swings. When the decision was finally announced, the impact was minimal.
Investor focus has returned to France in recent weeks, with analysts and economists voicing concerns that neither of the leading candidates in the election—President Nicolas Sarkozy and Socialist challenger François Hollande—have the policies to reform France and put it on track to meet deficit-reduction targets.
Also, after a brief period of calm in the wake of the European Central Bank's massive injection of liquidity into the banking system, worries over Spain's debt and growth prospects have resurfaced, fueling volatility in European bond markets.
At the beginning of the week there was also confusion over France's triple-A rating when Mr. Hollande said Moody's would decide on France's rating May 12, shortly after the second round of elections May 6.
Moody's, which put a negative outlook on France's triple-A rating Feb. 13, moved quickly to dispel the speculation that built up after Mr. Hollande's comments.
"The negative outlook on this rating does not signal an imminent change in the rating, but constitutes an indication of the likely direction in the 12 to 18 coming months concerning the factors under consideration," Moody's said in a statement Monday.
wsj.com
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