Joint euro bond would get weakest link's rating

Standard & Poor's Managing Director of European Sovereign Ratings Moritz Kraemer said that the rating of a common euro-area bond would reflect that of the "weakest" country if jointly guaranteed. "If it is a joint and not a several guarantee, then it would be the weakest link approach," Kraemer said at a conference in Alpbach, Austria yesterday. "My understanding is that it's a joint bond similar to the jumbo bonds in Germany," where smaller federal states that don't have enough issuance volume "gang together" and "everyone guarantees just his own bit," he said. Kraemer said S&P wasn't in talks with the European Union on a potential issue.