S&P Downgrades EU bailout fund due to downgrades of France and Poland.

[link to au.news.yahoo.com]

"PARIS (AFP) - The Standard and Poor's ratings agency downgraded the EU bailout fund EFSF by one notch to AA+ but said it would restore the top AAA ranking if the fund obtains additional guarantees.

The decision was the result of downgrades to France's and Austria's ratings from AAA since they served as top-level guarantors of the European Financial Stability Facility, S&P said in a statement.

"The EFSF's obligations are no longer fully supported either by guarantees from EFSF members rated 'AAA' by Standard & Poor's, or by 'AAA' rated securities," said S&P.

The eurozone's temporary bailout fund uses guarantees from its top-rated members to borrow funds at low rates on the market to loan onwards to countries which can no longer borrow on their own at affordable rates."