S&P Begins Downgrading Credit Ratings Linked to U.S.

August 8, 2011 - 10:41 AM

WASHINGTON (AP) - Officials at Standard & Poor's are downgrading the credit ratings of Fannie Mae and Freddie Mac and other agencies linked to long-term U.S. debt.

The agency says it has also lowered the ratings for: farm lenders; long-term U.S. government-backed debt issued by 32 banks and credit unions; and three major clearinghouses, which are used to execute trades of stocks, bonds and options.

All the downgrades were from AAA to AA+. S&P says the agencies and banks all have debt that is exposed to economic volatility and a further downgrade of long-term U.S. debt.

Officials at Standard & Poor's say they will also indicate shortly how local and state governments will be affected by their decision on Friday to lower the long-term U.S. debt from AAA to AA+.