Coface Lowers UK, Ireland, Iceland Ratings

The Paris-based business specialist has downgraded its credit ratings on the UK and Ireland to A2. Iceland, which had been placed on negative watch in March 2007, has been downgraded from A1 to A3. In addition Coface put Italy, France and Hong Kong on neg

 Coface said the credit crisis is
worsening significantly in the payment behavior of companies." A
credit crisis may be limited to a country, sector, region or may be
global," said the bulletin. "Coface has recorded four
global credit crises since 1973 and the first oil crisis. Coface
confirms that fifth global credit crisis has been ongoing since
January 2008 and notes three main characteristics:
— The payment
defaults index recorded by Coface rose by 36 percent during the
period January-September 2008, compared with the same period in 2007

— The spread of the crisis by is less than during former crises,
due to the resilience of emerging countries
— But the credit
squeeze is stronger, because of the very specific financial component
of this crisis.

In its analysis, Coface said the
"credit crisis should be comparable to the 2001 credit crisis,
but less extensive than the three former crises (1973, 1982, 1991).
Like the previous credit crises, the current crisis should last
between 18 months and 2 years, because even if the worldwide economy
enters a long period of flat growth, companies will adapt.