Standard & Poor’s downgrades Portugal’s credit rating

28 April 2010

Lisbon, Portugal, 28 April – Financial credit rating agency Standard & Poor’s Tuesday lowered its long term debt rating for Portugal from A+ to A-, at a time when pressure on Portuguese debt has made interest rates rise and led to a fall in stock values.

Prospects for Portuguese state debt remain negative.

In terms of short term debt Portugal’s rating now stands at A2.

The agency explained its decision by saying that the structural debilities of a budgetary and economic nature would place Portugal in a difficult situation to correct the significant imbalances of its public accounts and also warned that the country’s rating could be further reduced.

Standard & Poor’s in January 2009 lowered its rating for Portugal from AA- to A+ and in December put the country on negative outlook.

At the same time the agency lowered Greece’s rating from BBB+ to BB+, which is the same level as so-called “junk bonds”, with a negative outlook.

This decision has come at a time when financial markets have been penalising Portugal mainly due to hesitation from European partners in finalising financial aid for Greece. (macauhub)