We believe that Franco-Belgian banking group Dexia S.A. faces limited access to the wholesale funding markets and an increase in cash collateral requirements on hedges, thereby increasing short-term funding needs. Meanwhile, Dexia is deciding about how to proceed with its restructuring plan. We are lowering the ratings to 'A-/A-2' from 'A/A-1' on Dexia Crédit Local, Dexia Bank, and Dexia Banque Internationale à Luxembourg, which together represent over 90% of the group's consolidated assets. We are placing the 'A-/A-2' ratings on CreditWatch with developing implications. A placement on CreditWatch with developing implications means that we could take various rating actions on Dexia's operating banks. We expect to resolve the CreditWatch placement once we have more information about what the restructuring means
