US loses AAA Rating

Here's another:
If
following a downgrade, with no highly-liquid substitutes for U.S. Treasuries, the question becomes one of repricing. Investors will be willing to pay less for a bond that carries a lower rating and more risk. How much less? According to a New American article:

Tom Porcelli, chief economist at RBC Capital Markets, looked at the price performance of sovereign debt of four countries that lost their AAA rating and said the yields (which move inversely to bond prices) fell just six basis points — six one-hundredths of a percentage point — translating to a decline in bond prices scarcely worth mentioning.
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A Bloomberg story pegs the impact as being a little more significant, but not earth shattering:

A cut of the U.S.’s AAA credit rating would likely raise the nation’s borrowing costs by increasing Treasury yields by 60 to 70 basis points over the “medium term,” JPMorgan Chase & Co.’s Terry Belton said on a conference call hosted by the Securities Industry and Financial Markets Association.
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Click to expand...
http://seekingalpha.com/article/282227-how-a-downgrade-of-u-s-debt-will-impact-stock-and-bond-prices
 
Buster

Buster

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U.S. loses AAA credit rating from S&P

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NEW YORK (Reuters) - The United States lost its top-notch AAA credit rating from Standard & Poor's on Friday in an unprecedented reversal of fortune for the world's largest economy.
S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government's budget deficits and rising debt burden. The move is likely to raise borrowing costs eventually for the American government, companies and consumers.

http://news.yahoo.com/p-reconsideri...RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3
 
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