US Successfully Sells First Bonds with Downgraded Credit Rating

Posted August 9th, 2011 at 3:25 pm (UTC-5)
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The United States has successfully sold its first bonds since the country's credit rating was downgraded, and at a record low interest rate.

Investors have lost billions of dollars in the value of their stock holdings at exchanges throughout the world as the markets reacted to Standard & Poor's U.S. credit rating downgrade last Friday from AAA to AA-plus. But the U.S. government had no trouble Tuesday selling $32 billion in three-year notes at the low interest rate of one-half of one percent, a figure slightly lower than analysts had predicted beforehand.

Standard & Poor's credit rating cut was an indication that the firm's analysts view the U.S. as a slightly riskier bet to repay its debts than with the triple-A rating it held until last week. Two other ratings firms have maintained their AAA rating for the U.S.

With the U.S. credit rating cut, some financial experts predicted the country's borrowing costs would quickly increase.

But analysts said that even with the country's downgraded credit rating, many investors still view U.S. securities as a safe investment. Foreign central banks were among those that bought the U.S. bonds at Tuesday's auction.