Moody’s May Downgrade Spanish Credit Rating
December 15th, 2010Via: Bloomberg:
Spain’s credit rating may be cut from Aa1, Moody’s Investors Service said, as the government prepares its final bond sale of the year tomorrow amid concern it may follow Greece and Ireland in seeking a bailout.
Spain has to raise 170 billion euros ($226 billion) next year, while refinancing needs for its regions total 30 billion euros and for banks around 90 billion euros, Moody’s estimates.
“Spain’s substantial funding requirements, not only for the sovereign but also for the regional governments and the banks, make the country susceptible to further episodes of funding stress,” Kathrin Muehlbronner, an analyst at Moody’s, said in a report today.
Spain lost its top rating at Moody’s in September as euro- region leaders struggled to contain the debt crisis. Spain is raising taxes, slashing wages and privatizing state industries to persuade investors it can avoid a rescue. Ireland last month became the second euro nation to get a bailout.
The rating will probably remain in the “Aa” range, Moody’s said. The company doesn’t see a bailout as “likely,” even though it “can’t rule it out,” Muehlbronner said.
