Moody's lowers qualification of Spanish debt
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E-mail Xinhua, February 14, 2012
Debt qualification agency Moody's lowered its qualification of Spain's sovereign debt by two levels on early Tuesday.
The agency lowered its rating of Spanish debt overnight from A1 down to A3 at the same time it lowered the rating of five other European countries and gave a negative perspective to the AAA's currently enjoyed by France, Austria and Britain.
Italy, Portugal, Slovenia, Slovakia and Malta are the others having their ratings lowered, with those of Italy falling to A3 and Portugal down to Ba3.
"It reflects the susceptibility to the increasing financial and macro-economic risks that are involved in the eurozone crisis," explained Moody's communique, which also hinted at the risk of "a high chance of future market pressure on the financial conditions of countries and banks which are currently under stress."
This re-qualification is taking place in an economic climate in which the Spanish government of Prime Minister Mariano Rajoy has introduced a series of strong measures to reduce the Spanish deficit as well as an unpopular labor reform package.
Moody's decision also comes less than 24 hours after another ratings agency, Fitch, took the decision to lower its rating of several major Spanish banks.
Fitch dropped its rating on Monday of the long term debt of Banco Santander from AA- to A, while also lowering those of BBVA, CaixaBank and Bankia.
BBVA saw its rating fall from A+ to A, while CaixaBank and la Caixa drop to A- and Bankia drops to BBB+.
The good news for Bankia is that Fitch believes the bank has a stable future perspective, while the perspective for the other banks is negative.
Two weeks earlier Fitch had lowered its qualification of Spain's solvency by two degrees, from AA- down to A as a result of what it considered to be the 'significant worsening' of the fiscal perspectives in Europe.
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