U.S. Loan Guarantees for Israel Downgraded Too
Standard & Poor’s said ratings for the loan guarantees Israel obtains from the United States dropped commensurately with its downgrading of the U.S. credit rating.
The rating agency, one of three major credit raters, said Monday that the $6 billion Israel receives in guarantees dropped from its highest rating of AAA to AA+, as had the overall U.S. credit rating in the wake of 11th-hour negotiations between Congress and the White House over the terms of raising the U.S. debt ceiling, The Associated Press reported.
Unaffected was S&P’s overall rating for Israel, which remained at A/A-1, a level reporting a “strong” capacity to meet financial commitments.
Another major credit rater, Moody’s, had said before the debt ceiling matter was resolved that Israel might see its loan guarantees downgraded in the event that the United States was downgraded. Moody’s, however, did not downgrade its U.S. rating.
On Sunday, the Tel Aviv Stock Market experienced its largest one-day loss in nearly three years in reaction to the downgrade of the U.S. credit rating.
