Fitch Warns of Triple-A Credit Downgrade for World Bank if U.S. Withdraws Support
London (Reuters) - Fitch Ratings has joined Moody's in cautioning that the coveted triple-A credit ratings of the World Bank and other leading multilateral lenders could be jeopardized if the United States withdraws its support.
Following an Executive Order issued by President Donald Trump, a six-month review will assess U.S. funding to intergovernmental organizations, evaluating the potential for withdrawal or reform.
Fitch emphasized that "any indication of a potential withdrawal from an MDB (multilateral development bank) could trigger negative rating actions." While deeming a U.S. withdrawal as "unlikely," Fitch stressed the potential consequences, including financial detriment and a precedent that might undermine the unity of existing shareholders.
The rating agency anticipates that an immediate response could involve placing impacted MDBs on a downgrade warning, known as a "Rating Watch Negative." Whether triple-A ratings would be subsequently revoked "hinges on the withdrawal's terms and the reaction of other shareholders," Fitch explained.