Rising debt cause of concern, stick with rating, says S&P

The US credit downgrade has sent global equity markets in a downslide. In an interview with Maria Bartiromo, Deven Sharma, President of Standard & Poor's said that the decision was made mainly because of the rising debt levels and the process of resolving things.

Below is an edited transcript of his interview. Also watch the accompanying video. Sharma: After the debt deal, our analysts and team got together to discuss and evaluate and they came to a conclusion that the debt levels continue to rise even with the debt deal and the fact that the process of making these choices do not look any clearer at this point in time. Bartiromo: We are all scratching our head to look at a country, for example like France or other countries in Europe. How is it possible that France is higher rated than the United States right now? Sharma: France does have some credit attributes; its debt levels are slightly higher in terms of GDP ratio. However, with the reform act and the other fiscal consolidation plans they have put into place, their debt levels are starting to go down and they are implementing those plans and that is a big difference between a country like France and US. Bartiromo: Are you exploring France for possible downgrade? Sharma A: As long as they continue to reduce the debt levels and the debt ratios look reasonable, they will be in pretty good shape. If that doesn't happen, our sovereign team continues to analyze that. Bartiromo: If ratings are about creditworthiness, why are we talking about the political process? Do you need to come up with different ratings? Have you considered a different kind of rating for the process? Why downgrade the debt when it's about the political process? Sharma: The political process becomes important because that speaks to how the fiscal, economic and monetary choices are being made that influences the creditworthiness. To President Obama