Credit rating agency Egan Jones downgraded the United States Thursday on concern over the sustainability of public debt in the world's biggest economy.
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The U.S.'s rating was cut one notch to double A, two notches below the highest rating, down from double A plus. Egan-Jones is considered among the larger ratings firms after the big three of Standard & Poor's, Moody's Investors Service and Fitch Ratings.
Egan said the U.S.'s total debt as a percentage of gross domestic product may rise above 112% by the end of 2013, a level that will restrain the country's financial flexibility.
"Without some structural changes soon, restoring credit quality will become increasingly difficult," the company said in a statement.
Egan said there was a 1.2% probability that the U.S. would default in the next year.
S&P rates the U.S. double A plus after downgrading the country in August, while Moody's and Fitch both have a triple A rating on the U.S. While Egan has assigned the U.S. the lowest rating, all four agencies have a negative outlook for U.S. debt.