We believe that Dexia Crédit Local's (DCL) future recourse to short-term funding will remain significant. We also believe DCL's risk position has increased because its unrealized losses are likely to represent a majority of its capital and due to greater geographic concentration. We are lowering our long-term rating on DCL to 'BBB' from 'BBB+' and maintaining it and the 'A-2' short-term rating on CreditWatch negative. The negative CreditWatch reflects our view of the uncertainties regarding the outcome of DCL's restructuring plan and the bank's capacity to maintain an adequate level of capital. On March 28, 2012, Standard&Poor's Ratings Services lowered its long-term counterparty credit rating on Dexia Crédit Local (DCL) to 'BBB' from 'BBB+'. The long-term rating, the
