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Spain's credit rating was slashed by three notches on Thursday by Fitch, which signalled it could make further cuts as the cost of restructuring the country's troubled banking system spiralled and Greece's crisis deepened.
Fitch cut its rating on Spain's government debt by three notches to BBB and placed the country on 'negative outlook', meaning a further downgrade could come in coming months.
The new rating was Spain's lowest among the three main ratings agencies, and leaves it just two short of junk status, which would force many institutional investors to automatically dump Spanish assets.
"The negative outlook primarily reflects the risks associated with a further worsening of the euro zone crisis, notably contagion from the ongoing Greek crisis," the agency said in a release accompanying the downgrade.
Read more: http://www.smh.com.au/business/world-business/fitch-slashes-spain-rating-by-three-notches-to-bbb-20120608-1zzn2.html#ixzz1xHx7HNCs
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