Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Moody's downgrades Portugal's debt

By Aaron Smith, CNNMoney.com staff writer


NEW YORK (CNNMoney.com) -- Portugal is the latest European nation to get slapped with a downgrade on its debt. On Tuesday, Moody's Investors Services took Portugal's bond rating down a few notches, citing a foundering economy.

Moody's downgraded Portugal's government bond ratings to A1 from Aa2, saying this stemmed from "ongoing deterioration in the country's debt metrics."

"This deterioration came about due to the government's anti-crisis measures and the operation of the budget's automatic stabilizers, such as higher unemployment benefits, when the economy went into recession," wrote Anthony Thomas, vice president and senior analyst in Moody's sovereign risk group.

The rating agency also said the country's economy is "likely remain relatively weak unless recent structural reforms bear fruits over the medium to longer term."

Going forward, Moody's defined Portugal's rating outlook as "stable, with the upside and downside risks evenly balanced."

Moody's had placed Portugal's bond ratings on review for possible downgrade on May 5. Back in October 2009, the rating agency had changed the outlook on the Aa2 to negative from stable.

Portugal is a member of the so-called PIGS, a club of economically woeful nations in Europe, including Italy, Ireland, Greece and Spain.

On April 27, Standard & Poor's downgraded the sovereign ratings of Greece and Portugal to junk status, citing weak "macroeconomic structures." Moody's had downgraded Greece's government bonds just days beforeTo top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.60%3.68%
15 yr fixed2.73%2.79%
5/1 ARM3.02%3.04%
30 yr refi3.64%3.72%
15 yr refi2.77%2.82%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,651.33 -99.58 -0.56%
Nasdaq 4,727.47 -35.75 -0.75%
S&P 500 2,051.23 -12.14 -0.59%
Treasuries 1.79 -0.01 -0.78%
Data as of 2:34pm ET
Company Price Change % Change
Bank of America Corp... 14.08 -0.29 -1.98%
Freeport-McMoRan Inc... 11.72 -0.29 -2.41%
Apple Inc 94.04 -1.14 -1.20%
Micron Technology In... 9.84 -0.52 -5.02%
General Electric Co 29.92 -0.71 -2.32%
Data as of 2:19pm ET
Sponsors

Sections

The diet company's stock has shed nearly half its value this year. Investors are skeptical that Weight Watchers can turn things around -- despite the stamp of approval from board member and spokesperson Oprah Winfrey. More

The jobs market is near full employment with 14 million jobs added since early 2010. Gas prices are cheap. Home prices are rising. The stock market is near record highs. So why does everyone think the economy stinks? More

IBM puts its quantum computer online to let researchers, student and general public test computer that is exponentially faster than traditional digital computers. More

Visa says new software will allow consumers to check out with chip cards as fast as swiping a card with magnetic strip. More