(MENAFN) Moody's Investors Service assigned an Aaa rating with a negative outlook for European Stability Mechanism (ESM), the newly launched European bailout fund, reported Xinhua News.
Moody's said that the rating was based on the ESM's projected low leverage, the creditworthiness of the ESM's members, and the sound liquidity and capital management policy with an Early Warning System (EWS).
On the other hand, the agency said that the negative outlook was given as Moody's has assigned a rating of Aaa with a negative outlook for the countries with large contribution to the fund, including Germany with 27.1 percent share of the subscribed capital and France with 20.4 percent.
Moody's could either lower its assigned rating for the ESM or upgrade it if the creditworthiness of the member states worsened or improved.
It is worth noting that the USD657 billion ESM was launched to aid financially-troubled euro zone members that are either unable to access the capital markets, or able to do so only at very high interest rates.