LONDON, Feb 11 (Reuters) - Fitch has become the second top rating agency to warn that the prestigious triple-A credit ratings of the World Bank and other leading multilateral lenders may be jeopardized if Donald Trump withdraws U.S. support for them.
The US president recently signed an Executive Order initiating a six-month review of government support for all international intergovernmental organizations to assess the possibility of withdrawal or the need for reform.
"Fitch said any indication that a withdrawal from a multilateral development bank (MDB) could materialize might result in negative rating consequences," the agency remarked a day after issuing a similar caution.
While Fitch still considers U.S. withdrawals as "unlikely," it emphasized that if they were to occur, the repercussions would be significant, leading to financial harm, potentially establishing a precedent, and impacting the unity of remaining stakeholders.
Fitch also noted that the initial response would likely involve issuing a downgrade warning for the affected MDBs – signified as "Rating Watch Negative" in rating agency language.
The actual removal of their triple-A ratings would hinge on the terms of the withdrawal and the reactions of other shareholders, according to Fitch.