The ratings agency also said it could take further action, including further downgrades or even an upgrade, depending on how a proposed restructuring panned out.
The board of Dexia, whose shares are suspended, will meet in Paris on Saturday to vote on a break-up plan after Belgium and France pledged to guarantee its financing in the face of a share-price slide.
"We expect to resolve the CreditWatch placement once we have more information about what the restructuring means for Dexia's operating banks and more details about accompanying support that the French and Belgian governments could provide," S&P said in a statement.
S&P said it had lowered ratings by one notch to 'A-/A-2' on Dexia Credit Local, Dexia Bank and Dexia Banque Internationale a Luxembourg, which together represented over 90 percent of the group's consolidated assets.
It also placed those ratings on CreditWatch with developing implications.
"We could raise the ratings on some of Dexia's operating banks if separation from the group would strengthen their financial profiles or result in greater parent or government support," said the agency.
"The CreditWatch placement also reflects the possibility of a downgrade for some or all of Dexia's operating banks if funding problems deepen or asset sales accelerate," it added.