S&P downgrades EU to AA from AA+, outlook to stable from negative

Standard & Poor’s rating agency downgraded the European Union on Thursday, to AA from AA+, while placed the region under stable outlook from previous negative status.

From S&P statement:

“After the decision by the U.K. electorate to leave the EU as a consequence of the June 23 consultative referendum, we have reassessed our opinion of  cohesion within the EU, which we now consider to be a neutral rather than  positive rating factor.

We think that, going forward, revenue forecasting, long-term capital  planning, and adjustments to key financial buffers of the EU will be  subject to greater uncertainty.

As a consequence, we are lowering our long-term rating on the supranational European Union to 'AA' from 'AA+' and affirming the 'A-1+'  short-term rating.

The outlook is stable, reflecting our opinion that under most scenarios, including a U.K. withdrawal from future (though not current) budgetary   commitments, our anchor ratings on the EU will remain at the current level of 'AA/A-1+'.”