Moody's expects to affirm US credit rating (Reuters)

[Waiting For Everyman]

Moody's expects to affirm U.S. rating
By Walter Brandimarte and Daniel Bases

Fri Jul 29, 2011 6:38pm EDT

NEW YORK (Reuters) - Moody's Investor's Service expects to maintain the United States' top-notch rating for now, despite the "limited magnitude" of the deficit reduction plans being discussed in Washington.

But Moody's on Friday warned that affirmation of its Aaa credit rating for the United States will likely come with a negative outlook, meaning it would not downgrade the rating immediately but could do so in the medium term.

...

"If the debt limit is not raised before August 2, we believe that the Treasury would give priority to debt service payments and could thus postpone a potential debt default for a number of days," Moody's said in its report.

"Revenues would be more than adequate for some period of time to meet those payments, although other outlays would be severely reduced as a result."


http://www.reuters.com/article/2011/07/29/us-usa-ratings-moodys-idUSTRE76S6DL20110729

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After August 2, the first interest payment due on US Treasury debt is $31 billion due on August 15th. The first T-bill maturity date is August 4th, when $59 billion in T-bills mature. More details in article.

Sounds to me like an "understanding" has already been worked out, in case the deadline isn't met. Only thing is, it sounds like investors get paid first.

[Waiting For Everyman]

1. Kick

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