"If problems in the euro zone aren't solved quickly, then the conditions of refinancing will be expensive for these countries and the ratings agencies will do more downgrades," Ralf Ahrens, who helps manage about $20 billion as head of fixed income at Frankfurt Trust, told Bloomberg News. "We already see these dynamics in the market. I see France as a risk."
France, the second-largest economy in the eurozone, would be the biggest victim of the debt crisis that has engulfed Greece and Ireland and could still threaten Spain and Portugal.
Credit default swaps show it's cheaper to insure lower rated securities from countries like Chile and the Czech Republic than it is to insure French debt.
"Every sovereign may get penalized in the year ahead," Toby Nangle, who helps oversee $46 billion as director of asset allocation at Baring Asset Management in London, told Bloomberg News. "It would be a big deal if France was to have its AAA rating stripped. I don't think the likelihood of a downgrade is reflected in the market."