Scope Ratings GmbH (Scope) monitors and reviews its credit ratings on an ongoing basis and at least annually, or every six months in the cases of sovereigns, sub-sovereigns and supranational organisations that may act as a lender of last resort.

Scope performs monitoring reviews to determine whether material changes and/or changes in macro-economic or financial-market conditions could have an impact on the credit ratings. Scope considers all available and relevant information when undertaking the monitoring review.

Monitoring reviews are conducted by performing a peer comparison, benchmarking against the rating-change drivers, and/or reviewing the credit rating’s performance over time, as deemed appropriate by the Lead Analyst or Analytical Team Head, in addition to an assessment of all aspects of the relevant methodology/ies, including key rating assumptions and model(s). Scope announces the result of each monitoring review on its website and/or on its subscription platform ScopeOne.

Scope completed the monitoring review for the European Financial Stability Facility (long-term foreign-currency issuer and senior unsecured debt ratings: AA+/Stable; short-term foreign-currency issuer ratings: S-1+/Stable) on 12 January 2026.

This monitoring note does not constitute a credit-rating action, nor does it indicate the likelihood that Scope will conduct a credit-rating action in the short term. Information about the latest credit-rating action connected with this monitoring note along with the associated ratings history can be found on scoperatings.com.

Key rating factors

For the rating report accompanying this review, please see here.

Scope’s AA+ rating of the European Financial Stability Facility (EFSF) reflects the supranational’s highly rated key shareholders, strong guarantee mechanism and favourable capital market access. Challenges relate to the EFSF’s mandate to lend to euro area crisis-hit countries, its portfolio concentration and lack of preferred creditor status, which results in moderate, albeit recently improving, asset quality, and its shareholder base, which is highly concentrated.

As of July 2013, the EFSF can no longer engage in new financial assistance facilities. However, the EFSF continues to manage existing programmes in Greece (BBB/Positive), Portugal (A/Positive) and Ireland (AA/Stable), including the repayment of outstanding debts. Repayments by the EFSF’s three borrowers stretch over a long period, with Portugal expected to make its final repayment in 2040, Ireland in 2042 and Greece in 2070. The EFSF thus remains a large issuer in capital markets with a funding programme of EUR 18.5bn in 2026.

While the EFSF does not have any meaningful capital, 13 euro area member states provide irrevocable, unconditional, timely guarantees and over-guarantees for the EFSF’s debt issuances. The four largest euro area economies – Germany (AAA/Stable), France (AA-/Negative), Italy (BBB+/Positive) and Spain (A/Positive) – jointly guarantee 83% of the EFSF’s liabilities, providing them with significant control in the decision-making bodies. These four sovereigns thus constitute the EFSF’s key shareholders, with a weighted-average rating of AA-.

The EFSF also has a strong institutional setup with an over-guarantee of up to 165% of outstanding debt securities, resulting in guarantees of around EUR 724.5bn for a maximum lending capacity of EUR 440bn. Around two-thirds of maximum debt issuance is covered by guarantees from sovereigns rated AA or higher, after adjusting for over-guarantees, including from Germany (48.0%), the Netherlands (10.1%), Austria (4.9%), Finland (3.2%) and Luxembourg (0.4%).

The EFSF’s key shareholder rating has been stable in recent years, including following a one-notch downgrade of France to AA-/Stable in October 2024. At the same time, France’s sovereign downgrade weakened Scope’s assessment of the strength of the EFSF’s over-guarantee mechanism, as the share of maximum liabilities covered by guarantors rated AA or above fell from over 100% to around 67%. This had no impact on the final rating of the EFSF, but it lowered buffers for potential future downward rating actions on key shareholders.

If either Germany’s sovereign rating, or any two of the other key shareholders’ ratings, were downgraded by one notch, all other things equal, this would lead to a lower average key shareholder rating of A+ and therefore a one-notch downgrade of the EFSF’s long-term rating.

The Stable Outlook reflects Scope’s opinion that risks to the credit ratings over the next 12 to 18 months are balanced.

A downside scenario for the ratings and Outlooks is:

1. Germany or any two of the other key shareholders were downgraded.

Upside scenarios for the ratings and Outlooks are (individually or collectively):

1. Key shareholders were upgraded;
    
2. The EFSF’s liquidity buffers increased significantly and permanently.

The methodology applicable for the reviewed ratings and/or rating Outlooks (Supranational Rating Methodology, 23 May 2025) is available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Julian Zimmermann, Director

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