KBRA Affirms AA/K1+ Ratings for the French Republic; Stable Outlook
14 Jun 2024 | Dublin
KBRA Europe (KBRA) affirms long-term issuer ratings of AA for the French Republic. KBRA also affirms the short-term ratings of K1+ of the sovereign. The Outlook on the long-term ratings is Stable.
| This credit rating is an unsolicited credit rating | |
|---|---|
| With Rated Entity or Related Third-Party Participation | Yes |
| With Access to Internal Documents | No |
| With Access to Management | Yes |
KBRA’s affirmation of the ratings reflects France’s large, wealthy, diversified, and resilient economy, robust institutional framework, global geostrategic importance, strong access to liquidity, which has not weakened despite mounting fiscal challenges and euro area membership. The primary rating constraints are France’s elevated general government debt burden and persistent budget deficits. The Stable Outlook considers the deterioration of public finances and the weak primary balance position, which will make fiscal consolidation challenging, against the sovereign’s strong and undiminished access to liquidity. The upcoming Parliamentary election brings about heightened uncertainties regarding the thrust of policies and could test the Stable Outlook. In particular, although France has very strong access to liquidity, recent financial markets conditions, should they be durable and/or worsen, could also affect KBRA’s view on the creditworthiness of the sovereign.
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