Open

Coming up

Don't miss

Replay


LATEST SHOWS

WEB NEWS

France's top consumer group sues Internet giants

Read more

WEB NEWS

Web users pay tribute to South Korea ferry victims

Read more

AFRICA NEWS

A landslide victory for the 'invisible candidate' in Algeria's Presidential polls

Read more

THE WORLD THIS WEEK

The World This Week - 18 April 2014

Read more

THE WORLD THIS WEEK

The World This Week - 18 April 2014 (part 2)

Read more

MEDIAWATCH

Presidential adviser resigns over "shoe-shine scandal"

Read more

#THE 51%

Breaking stereotypes

Read more

#TECH 24

Galaxy S5 v. HTC One (M8): Which is the right one for you?

Read more

FRANCE IN FOCUS

New PM Manuel Valls outlines priorities

Read more

  • Why Syria’s cash-strapped jihadists let hostages go

    Read more

  • Video: Ukraine separatist crisis overshadows Easter celebrations

    Read more

  • The Great War's unsung four-legged heroes

    Read more

  • Divers begin pulling bodies from sunken South Korean ferry

    Read more

  • Ukraine rebels call for Russian troops after deadly clash

    Read more

  • UK’s Hamilton cruises to victory at Chinese Grand Prix

    Read more

  • Freed French journalists arrive home after Syria ordeal

    Read more

  • Syria’s Assad visits recaptured Christian town at Easter

    Read more

  • In pictures: French kite festival takes flight

    Read more

  • Le Pen’s National Front fail to woo Britain’s Eurosceptics

    Read more

  • PSG clinch fourth League Cup title after beating Lyon

    Read more

  • Militants kill Algerian soldiers in deadly ambush

    Read more

  • Scores killed in South Sudan cattle raid

    Read more

  • VIDEO: Anti-Semitic leaflets in Eastern Ukraine condemned

    Read more

  • Bouteflika, the ghost president

    Read more

  • Does Valls’ upcoming Vatican trip violate French secularism?

    Read more

  • Ukraine separatists say ‘not bound’ by Geneva deal

    Read more

  • Abel Ferrara’s hotly awaited DSK film to premiere on web

    Read more

  • Obama signs bill to block controversial Iran diplomat from UN post

    Read more

  • Astronomers discover Earth-like planet that could support life

    Read more

  • In pictures: Iranian woman pardons son’s killer at the gallows

    Read more

Europe

Moody’s slashes Spain’s credit rating

©

Text by News Wires

Latest update : 2012-06-14

Moody’s Investor Service downgraded the Spanish government’s credit rating on Wednesday by three notches, from A3 to Baa3, just above junk status, as a direct result of the country’s eurozone rescue package over the weekend.

AP - Moody’s Investor Service cut the Spanish government’s credit rating, a direct result of the rescue package lined up by European leaders over the weekend.

The rating lowered Spain’s rating from A3 to Baa3, which leaves it in investment-grade status but just one notch above junk.

The downgrade Wednesday comes after European leaders announced a €100 billion ($125.64 billion) loan to Spain on Sunday. The loan is meant to help Spain shore up its hobbled banking system. But it will also increase the government’s debt burden, according to Moody’s.

That higher debt burden has pushed Spain’s borrowing costs to record highs this week.

Moody’s said it put Spain on review for another possible downgrade in the coming months.

The rating agency gave the same downgrade to the country’s fund for bank restructuring, known as Spain’s “Fondo de Reestructuración Ordenada Bancaria”, which was created in 2009 to oversee mergers of banks to help strengthen the country’s banking system.

Moody’s said the fund’s debt got the same rating because it is fully and unconditionally guaranteed by the government.

“While the details of the support package have yet to be announced, it is clear that the responsibility for supporting Spanish banks rests with the Spanish government,” Moody’s said in a note.

The agency expects Spain’s public debt ratio will rise to around 90 percent of its gross domestic product this year and continue to increase until the middle of the decade.

Moody’s and other rating agencies have lowered their ratings on a number of European governments and financial institutions recently, given the economic turmoil in region

The rating agency also downgraded the bond rating of Cyprus’s government Wednesday by two notches to Ba3 from Ba1, sinking it further into junk-grade status on the increasing likelihood that Greece will exit the euro.

Cyprus has heavy exposure to Greek banks and Greece’s exit from the euro would increase the amount of support that Cypress would have to extend to its banks at a time when the country’s finances are already strained and it has little access to international markets.

Moody’s said Cyprus’s rating is under review for further downgrades.

Date created : 2012-06-14

  • SPAIN

    Fitch cuts Spain rating amid Greek contagion concerns

    Read more

  • SPAIN - BANKING

    Spanish premier hails €100 billion eurozone lifeline

    Read more

  • SPAIN

    Spain passes crucial bond sale test, but costs soar

    Read more

Comments

COMMENT(S)