Moody’s investors service released a research report on Wednesday to cut the Spanish sovereign debt rating from “A3″ down to “Baa3″, and put it on the downgrade watch list, which means that the credit rating service agency may further downgrade the Spanish sovereign debt rating in the future..
Moody’s pointed out in the report that the decision of downgrading the Spanish sovereign debt rating is because the company plans to borrow 100 billion euros (about us $ 126 billion) at most from the European financial stability Fund (EFSF), Spain’s ability to enter financial markets is limited, and Spanish economy is increasingly vulnerable to the eurozone sovereign debt crisis. Moody’s said the company will make a decision on whether to further cut the Spanish sovereign debt rating decision within the next three months.
Prior to that, another credit rating service institution Egan-Jones has lowered the Spanish sovereign debt rating from “B” down to “CCC+”.
In the trading in the bond market on Wednesday, 10-year Spanish Treasury note yield rose to 6.75%.