S&P lowers Dexia Credit Local

Standard & Poor's said it lowered the long-term counterparty credit rating on Dexia Credit Local to BBB from BBB+.

The long-term rating, the A-2 short-term rating and the B- subordinated debt ratings remain on CreditWatch with negative implications, where they were placed in November.

The downgrade reflects a view that the company's future recourse to short-term funding will remain significant relative to the balance sheet, S&P said.

Dexia Credit also rapidly increased its use of the temporary government guarantee debt agreement signed by the Belgian, French and Luxembourg governments in December 2011 to cover its refinancing needs for 2012 and eliminate its unsecured debt with Dexia Bank SA, the agency said.

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