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UPDATE 1-Moody's affirms Austrian top rating, but warns of risks
September 21, 2012 / 9:57 PM / 5 years ago

UPDATE 1-Moody's affirms Austrian top rating, but warns of risks

(Adds ratings of S&P and Fitch)

NEW YORK, Sept 21 (Reuters) - Moody’s Investors Service on Friday affirmed Austria’s top Aaa government bond rating, but warned it might eventually cut the rating due to the country’s vulnerability to the euro zone debt crisis.

The credit rating agency cited Austria’s “widely diversified and competitive” economy, as well as its “good track record of achieving and maintaining low budget deficits.”

But Moody’s kept its outlook negative.

“In Moody’s view the likelihood is rising that Austria - alongside the other strong euro area states - will need to commit significant additional resources to support euro area sovereigns and their banks,” the rating agency said in its statement.

“In addition, Austria’s banking sector itself continues to constitute a vulnerability given the banks’ continued weak asset quality and capitalization levels, which prompted the negative outlook on Austria’s Aaa sovereign rating in February 2012.”

Standard & Poor’s in January cut Austria to AA-plus with a negative outlook from AAA, part of a mass downgrade of euro-zone sovereigns.

Fitch rates Austria AAA with a stable outlook. (Reporting by Luciana Lopez and Caryn Trokie; Editing by Dan Grebler and Leslie Adler)

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