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Bonds News

Moody's says US needs debt plan to keep rating-DJ

NEW YORK, July 29 (Reuters) - The U.S. government needs to elaborate a credible plan to address its soaring debt in order to maintain its Aaa credit rating, Moody’s Investors Service’s told Dow Jones newswire.

If U.S. government budget projections for debt as a percentage of national output and interest payments as a percentage of revenue are realized in coming years, the country’s Aaa rating would come under scrutiny, Steve Hess, a senior credit officer in the sovereign risk group at Moody’s told Dow Jones Newswires in an interview.

Such a scenario, however, wouldn’t lead to an automatic downgrade, Hess said. The analyst said the United States appears to have “no plan” to deal with its fiscal situation and that much will depend on the domestic political reaction to recommendations by President Barack Obama’s fiscal responsibility commission in December.

The U.S. rating remains on a stable outlook at Moody’s. (Reporting by Vivianne Rodrigues; Editing by Padraic Cassidy)

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