--- title: "France pays above 5% on 10-year debt for the first time since 2002 while S&P Global grades it A+" description: "Moody's rules on France after the US close tonight and a cut to A1, level with S&P Global's A+, is expected. The bond market has already gone further, pricing French debt above Italy, Greece and the United States at yields unseen since 2002." publisher: "The Inference" section: "Economy" published: 2026-10-23T16:26:27.134Z modified: 2026-10-23T16:26:27.134Z canonical: https://theinference.org/article/france-pays-above-5-on-10-year-debt-for-the-first-time-since-2002-while-s-p-global-grades-it-a language: en keywords: "France, Sovereign Debt, Credit Ratings, Bond Yields, Moody's, S&P Global" --- # France pays above 5% on 10-year debt for the first time since 2002 while S&P Global grades it A+ > Moody's rules on France after the US close tonight and a cut to A1, level with S&P Global's A+, is expected. The bond market has already gone further, pricing French debt above Italy, Greece and the United States at yields unseen since 2002. ## Moody's decides tonight; the market ruled on Thursday [Moody's](https://theinference.org/markets/companies/moody-s) publishes its regular review of France at 2000 GMT tonight [1][2]. It holds the country at Aa3, on negative outlook since October 2025, and most analysts expect a cut to A1, the equivalent of the A+ [S&P Global](https://theinference.org/markets/companies/s-and-p-global) already gives France [1][2]. A cut would put Moody's in line with S&P and Fitch, which moved earlier [1]. The bond market went further, and faster. France's ten-year OAT, the benchmark government bond, closed at 5.0799% on Thursday, a 24-year high and the first close above 5% since July 2002; the premium over Germany's ten-year Bund stretched to 174 basis points, the widest since 2011 [3]. *Chart: **France pays more than America to borrow for ten years** Ten-year government bond yields at Thursday's close: France 5.08%, United States 5.00%, Germany 3.34%.* *Ten-year sovereign bond yields at Thursday's close, October 22, 2026, percent. Source: Boursorama market report, October 23, 2026. [3]* France's three largest banks, [BNP Paribas](https://theinference.org/markets/companies/bnp-paribas), Société Générale and Crédit Agricole, fell between 2.5% and 4.8% on sovereign-debt worries, and [the Stoxx 600 banks index lost 3.49%](https://www.boursorama.com/bourse/actualites/l-europe-finit-dans-le-rouge-le-taux-d-emprunt-de-la-france-grimpe-encore-9e93c9876783edcac2649d99203ae88a) [3]. ## One firm rates the debt and measures the slump The complication sits inside one company. S&P Global grades France A+ [2]. S&P Global also runs the [flash purchasing managers' survey](https://kfgo.com/2026/10/23/french-business-activity-contracts-in-october-amid-political-financial-pressures-pmi-shows/), and on Friday it showed French business activity contracting. The composite index, where below 50 signals contraction, fell to 48.4 from 51.1 in September, below the 50.5 economists expected [5]. Firms' expectations for the year ahead sank to a six-and-a-half-year low, tied to the budget fight and the 2027 election [5]. [France now pays more to borrow for ten years than Italy, Greece and the United States](https://www.msn.com/en-us/news/other/french-10-year-oat-yield-trims-falls-after-pmi-data/ar-AA2fSbvh), and the company grading it A+ is the same one measuring the slump [3][4]. ## The same firm also rates the AI build-out Thursday's [Meta](https://theinference.org/markets/companies/meta)- and [Tesla](https://theinference.org/markets/companies/tesla)-led selloff took the Nasdaq down 2.2%, with Infineon and [ASM International](https://theinference.org/article/investors-cut-asm-international-8-6-on-a-china-scare-its-oct-27-report-tests-a-1-1-billion-quarter) down more than 6% [3]. Three days earlier, S&P's head of digital infrastructure, Mark Habib, told a London roundtable that "it is safe to assume that there is more (debt) out there that we are not seeing" [6]. S&P expects [Amazon](https://theinference.org/markets/companies/amazon), [Microsoft](https://theinference.org/markets/companies/microsoft), [Alphabet](https://theinference.org/markets/companies/alphabet), [Oracle](https://theinference.org/markets/companies/oracle), Meta and [SpaceX](https://theinference.org/markets/companies/spacex) to spend more than $7 trillion on AI through 2030, with negative free cash flow until at least 2027; [it cut Oracle to BBB- in July](https://www.msn.com/en-nz/money/general/top-hyperscalers-likely-to-have-more-ai-linked-debt-than-now-known-s-p-global-warns/ar-AA2fAmJO), yet sees no "major disconnect" forcing broader downgrades [6][7]. ## Who pays while the ratings catch up The arithmetic behind A+ is public: gross debt at 119% of GDP, a deficit above 5% with no credible plan to shrink it, and a 2027 budget whose key savings the lower house has already scrapped [1][2]. Curfews are in force in Paris and Lyon after riots and more than 2,000 arrests, with protests called again for Saturday [1][8]. The presidential election, in two rounds on April 18 and May 2, 2027, is one polls suggest the far right, fronted by Marine Le Pen, could win [1][8]. ## Either the spread or the grade is wrong The gap between the grade and the spread is the trade. Either 174 basis points is too wide for a country S&P grades A+ and Moody's is expected to match at A1, in which case French bonds against German Bunds, and French bank shares, are the short into the agencies' reviews; or the market has already priced France below A, and the agencies' A grades are the trade. Mike Bell of RBC BlueBay Asset Management sets the cliff below: if Moody's, S&P and Fitch all cut France to BBB, [funds with rating limits become forced sellers of the bonds](https://finance.yahoo.com/economy/policy/articles/unrest-hit-france-poised-moodys-103545024.html), and "that's where it could really start to get more ugly" [1]. Next readings: Saturday's protests, then the ECB on October 29 with December rate rises already priced [1][3]. Moody's decides at 2000 GMT tonight [1]. ## Takeaway The bond market has priced France below its A ratings: the 10-year OAT closed above 5% for the first time since 2002, and Moody's expected cut to A1 tonight would only confirm what traders already believe. ## Sources 1. [Reuters via Yahoo Finance, "Unrest-hit France poised for Moody's ratings verdict", 23 October 2026](https://finance.yahoo.com/economy/policy/articles/unrest-hit-france-poised-moodys-103545024.html) 2. [The Economist, "Losing confidence in France", The World in Brief, 23 October 2026](https://www.economist.com/the-world-in-brief/2026/10/23/bc90e847-bc16-4172-9891-e09ab5c09d7b) 3. [Boursorama (Reuters market report by Diana Mandiá), "L'Europe finit dans le rouge, le taux d'emprunt de la France grimpe encore", 23 October 2026](https://www.boursorama.com/bourse/actualites/l-europe-finit-dans-le-rouge-le-taux-d-emprunt-de-la-france-grimpe-encore-9e93c9876783edcac2649d99203ae88a) 4. [The Wall Street Journal via MSN, "French 10-Year OAT Yield Trims Falls After PMI Data" (bond market wrap), 23 October 2026](https://www.msn.com/en-us/news/other/french-10-year-oat-yield-trims-falls-after-pmi-data/ar-AA2fSbvh) 5. [Reuters via KFGO, "French business activity contracts in October amid political, financial pressures, PMI shows", 23 October 2026](https://kfgo.com/2026/10/23/french-business-activity-contracts-in-october-amid-political-financial-pressures-pmi-shows/) 6. [Reuters via MSN, "Top hyperscalers likely to have more AI-linked debt than now known, S&P Global warns", 19 October 2026](https://www.msn.com/en-nz/money/general/top-hyperscalers-likely-to-have-more-ai-linked-debt-than-now-known-s-p-global-warns/ar-AA2fAmJO) 7. [DataCentral, "S&P warns of opaque AI infrastructure liabilities", 20 October 2026](https://data-central.co.uk/sp-warns-of-opaque-ai-infrastructure-liabilities/) 8. [The Economist, "The world this week: Politics", 22 October 2026](https://www.economist.com/the-world-this-week/2026/10/22/politics) --- France pays above 5% on 10-year debt for the first time since 2002 while S&P Global grades it A+ — The Inference. Canonical: https://theinference.org/article/france-pays-above-5-on-10-year-debt-for-the-first-time-since-2002-while-s-p-global-grades-it-a