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Financial News Network
June 08, 2011 AT 8:00 PM
The United States would probably be unable to maintain its AAA sovereign ratings, even if it just suffered a technical default, Fitch Ratings said on Wednesday.The Agency said it would downgrade U.S. sovereign debt ratings to "restricted default" if the government failed to honor Treasury notes and some coupon payments on Treasuries due on August 15th, shortly after the Treasury Department would have exhausted its efforts to put off a default.Fitch said in its statement, "Even a so-called 'technical default' would suggest a crisis of 'governance' from a sovereign credit and rating perspective and though such an event (such as a short-lived Treasury bill default) may not permanently impair the capacity of the U.S. government to service its obligations, it is unlikely that its 'AAA' status would be retained in the short to medium term."Fitch did add that it believes American lawmakers will ultimately reach some sort of agreement and raise the debt ceiling to avoid even a "technical" default.