Moody's upgrades European Stability

Moody's Investors Service said it upgraded the European Stability Mechanism's long-term issuer and senior unsecured ratings to Aaa from Aa1 and the senior unsecured medium-term note program rating to (P)Aaa from (P)Aa1.

Concurrently, the agency raised the European Financial Stability Facility's long-term issuer and backed senior unsecured ratings to Aaa from Aa1 and the backed senior unsecured MTN program rating to (P)Aaa from (P)Aa1

“The key driver for today's rating actions is Moody's view that the improved robustness of the European crisis-fighting architecture – as exemplified during the coronavirus pandemic – reduces the risk of a systemic crisis with a high default correlation among E.U. member countries,” the agency said in a press release.

The outlook remains stable for both the ESM and the EFSF.

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