Standard and Poor’s lowers Portuguese sovereign debt rating to “BBB”

25 March 2011

Lisbon, Portugal, 25 March – Credit rating agency Standard and Poor’s has lowered its rating on Portugal’s sovereign debt by two levels to “BBB” based on the political uncertainty caused by the resignation of Prime Minister José Sócrates.

S&P’s decision takes Portuguese sovereign debt one step away from “junk” status, and now needs only to drop to “BB+” to be considered a speculative or high-yield investment.

For the same political reasons, Fitch also lowered the rating on Portugal’s debt by two levels and stopped assuming that the country would continue to have access to the market.

The rating given by the US agency fell from “A+” to “A-“ on continued negative outlook, which is a warning that further cuts could be made.

Last week credit rating agency Moody’s said it had lowered its rating on Portugal by two notches, from A1 to A3, with negative outlook. (macauhub)