BRUSSELS, Jan 16 (Reuters) - The European Financial Stability Facility (EFSF) will retain its effective lending capacity of 440 billion euros despite Standard & Poor’s decision to downgrade its long-term rating by one notch to AA+, EFSF director Klaus Regling said on Monday.
S&P decided to lower the rating on the EFSF three days after it lowered the rating on France and Austria, two formerly AAA countries whose guarantees underpinned the eurozone bailout fund. S&P kept the EFSF short-term rating at the highest grade.
“The downgrade to ‘AA+’ by only one credit agency will not reduce EFSF’s lending capacity of 440 billion,” Regling said.
“The EFSF has sufficient means to fulfill its commitments under current and potential future adjustment programmes until the ESM becomes operational in July 2012.”
The EFSF was set up in May 2010 and has so far been used to bail out Ireland and Portugal.