27 July 2012 7:17am

When Moody’s Investor Service placed a negative outlook on the Aaa ratings assigned to Germany, the Netherlands and Luxembourg on Tuesday, the ratings on entities closely associated with these sovereigns were similarly affected.

In particular, the Aaa ratings assigned to two state-sponsored development banks – KfW and Rentenbank – and the "bad bank" from the rescue of Hypo Bank – FMS Wertmanagement – all now have negative outlooks.

The three German agencies are substantial bond issuers in the Australian domestic market.

Other significant issuers include the Council of...