S&P threatens downgrade of U.S. finance companies
NEW YORK (Reuters) – Standard & Poor’s on Friday raised the pressure on Washington debt negotiators, saying it could downgrade insurers, securities clearinghouses, mortgage agencies and a laundry list of other firms if there is not a deal soon to lift the debt ceiling and cut the deficit.
The ratings agency singled out Fannie Mae
S&P characterized its targets as “entities with direct links to, or reliance on, the federal government.”
Many of the firms that landed in that target were quick to put the onus right back on President Barack Obama and the congressional leaders trying to hash out a deal to stave off a debt default.
“Whatever happens will have nothing to do with us, and everything to do with Washington. The hope on everyone’s part is obviously that Washington gets its act together so that both their rating and ours can remain where they belong-at AAA,” said Patrick Korten, a spokesman for insurer Knights of Columbus, which was on the negative watch list.
Among the other insurers put on watch, a spokesman for Goldman Sachs
Another broad group in S&P sights is the clearinghouses, which guarantee contracts tied to everything from oil contracts to shares of Google
“It’s not unexpected, and we don’t see this as a reflection on how OCC conducts its business,” said Jim Binder, spokesman for the OCC, which clears U.S. options or futures for 14 exchanges. “It’s all about what’s going on in Washington.”
The U.S.-based Depository Trust & Clearing Corporation, which runs the National Securities Clearing Corporation and the Depository Trust Company, did not immediately comment.
Freddie Mac also declined to comment.
(Reporting by Ben Berkowitz, Jonathan Spicer and Dan Wilchins in New York and Margaret Chadbourn in Washington; Writing by Ben Berkowitz; Editing by James Dalgleish)
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