BRUSSELS, July 25 (Reuters) - The euro zone temporary bailout fund, the European Financial Stability Facility (EFSF), does not expect any immediate downgrade of its rating from Moody’s after the rating agency changed its outlook for the EFSF to negative from stable.
“The rating outlook has a time horizon of 12-18 months and therefore does not indicate any rating action for EFSF in the immediate future,” the EFSF said in a statement.
EFSF borrows money on the market, thanks to euro zone government guarantees, to lend it on to euro zone sovereigns cut off from bond markets.
The move to downgrade the outlook for the triple A fund followed similar changes to the outlook for some of its AAA sovereign guarantors -- Germany, the Netherlands and Luxembourg.
“The negative outlook does not outweigh the fact that despite volatile market conditions, the EFSF is a well-established and trusted issuer, as evidenced by our recent 6-month bill, placed at a negative yield of -0.0113 percent,” EFSF Chief Executive Klaus Regling said in the statement. (Reporting By Jan Strupczewski; editing by Rex Merrifield)