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S&P cuts credit rating of Spain by two notches

April 27, 2012

Standard & Poor's cut Spain’s credit rating by two notches to BBB+ from A and also put the outlook on "negative", citing expectations the government finances will deteriorate more than previously thought as a result of a contracting economy and an ailing banking sector.

"We think risks are rising to fiscal performance and flexibility, and to the sovereign debt burden, particularly in light of the increased contingent liabilities that could materialize on the government's balance sheet," S&P stated. Moody's rates Spain A3 with a negative outlook, and Fitch holds A, also with a negative outlook.