Very Strong Intrinsic Assessment for the EIB, EIF and ESM Compensates for Negative Credit Rating Action on France

Morningstar DBRS' decision to change the trend on France's AA (high) Long-Term Issuer Rating from Stable to Negative on 21st of March 2025, does not affect the creditworthiness of the European Investment Bank (EIB), the European Investment Fund (EIF) and the European Stability Mechanism (ESM), all rated AAA, with a Stable trend. While a potential downgrade of France could have an impact on the Support Assessment (SA) of these entities, the AAA level of their Intrinsic Assessments (IA) would compensate for a future deterioration in the SA that could arise from a downgrade of France.

Key Highlights
-- The change in the trend to Negative from Stable on France's long-term credit ratings does not change our credit view on the EIB, the ESM and the EIF.
-- France's importance among core shareholders could affect the Support Assessments (SA) of the EIB, the ESM and the EIF in case of a meaningful credit deterioration.
-- Intrinsic Assessments of the EIB, the ESM and the EIF remain equivalent to AAA and compensate for the potential future deterioration in the SA that could arise from a downgrade of France.

"The change in the trend of France's rating does not change our view on the EIF, the EIB and the ESM ," said Carlo Capuano, Senior Vice President, Global Sovereign Ratings. "These institutions benefit from several intrinsic factors, including strong capitalisation, strong mandate and preferred creditor status, among other things. These features are not affected by the negative trend on France's credit rating, and we believe that a potential one notch downgrade of France would be amply compensated by the strong intrinsic assessment."