European credit quality continues stabilizing trend, Moody's says

New York, Oct. 28 - European credit quality showed a further slowing in its deterioration during the third quarter, according to Moody's Investors Service.

During the three months Moody's downgraded 24 western European issues, the smallest total since the second quarter of 2000.

The total of 17 upgrades was also better than the quarterly average for the past three years.

As a result, the ratio of downgrades to upgrades narrowed "markedly" to 1.4:1, the best figure in three years, Moody's said.

Driving the improvement is a drop in the number of downgrades to insurance companies and more stable credit quality in the utility and telecommunications sectors, Moody's said.

For the rest of the year, the rating agency sees the trend continuing although it still expects downgrades to exceed upgrades in the fourth quarter.

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