Bloomberg News

Spanish Banks Said to Be Set for Ratings Downgrade by Moody’s

June 25, 2012

Spanish Banks May Have Ratings Downgrade by Moody's

A Spanish national flag flies in Madrid. Sixteen Spanish banks were lowered by Moody’s on May 17 on economic weakness and the government’s mounting debt. Photographer: Angel Navarrete/Bloomberg

Spanish banks may have their credit ratings cut by Moody’s Investors Service for a second time in less than six weeks after the nation’s sovereign rating was lowered, said three people with knowledge of the situation.

The downgrades may be announced as early as today or tomorrow, said the people, who asked not to be identified because they aren’t authorized to discuss the matter publicly. A Moody’s official in London declined to comment by phone.

Spain’s credit grade was lowered three steps on June 13 by Moody’s, which cited the nation’s increased debt burden, weakening economy and limited access to capital markets. The country was reduced to Baa3 from A3 and remains on review for a further cut as it plans to borrow 100 billion euros ($125 billion) from European Union rescue funds to recapitalize its banking system, adding to the government’s debt load, New York- based Moody’s said at the time.

Sixteen Spanish banks were lowered by Moody’s on May 17 on economic weakness and the government’s mounting debt.

Newspaper Expansion reported earlier today that the nation’s banks may be cut by Moody’s, citing an unidentified executive at a Spanish lender.

To contact the reporter on this story: Charles Penty in Madrid at cpenty@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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