November 28, 2011 / 11:40 PM / 6 years ago

Euro crisis unlikely to trigger U.S. downgrade: Fitch

NEW YORK (Reuters) - There is little chance of a “material adverse shock” occurring in the United States in 2012 that would lead Fitch Ratings to cut the country’s top-tier credit rating, including a deepening of the European debt crisis, a top analyst with the ratings agency said on Monday.

Even a short U.S. economic recession would not be a reason for a downgrade, analyst David Riley told Reuters in an interview after Fitch revised its outlook on the United States’ top AAA rating to negative from stable.

“You can never say never, but it’s not our expectation that there is going to be any material developments that would lead us to change the rating over the next 12 months,” Riley said.

“If we had a relatively short downturn because, for example, the crisis in Europe got much worse and there was a spillover effect to the U.S. but we thought that it ultimately would prove to be temporary for the U.S. ... then that wouldn’t necessarily lead us to change the rating.”

Fitch is willing to give the new U.S. government that will come into office in 2013 several months to come up with a credible deficit-reduction plan before deciding on the rating.

“Once we move to the second half (of 2013) and it looks as if a deal can’t be done, then the (negative) outlook would likely result in a downgrade,” Riley said.

“If a deal can be done and that deal looks reasonably sound and we think it can potentially work and stabilize the debt level, then there is a great prospect that we would move back to a stable outlook.”

Editing by Leslie Adler

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