Friday, 21 October 2011

Moody's downgrades Andalucía's long term debt

ANDALUCÍA (Agencies) On Wednesday, Moody's, the credit ratings company, downgraded the long term credit ratings of ten regional autonomies in Spain, among which was Andalucía, which fell from Aa3 to A2 on a negative trend. According to Moody's, "The two-notch downgrade of the ratings of Andalucia and Castilla y León (to A2 negative from Aa3), Murcia (to Baa1 negative from A2), and Generalitat de Valencia (to Baa2 negative from A3) reflects the pressures on their fiscal positions and the ordinal ranking of their credit quality relative to the sovereign [debt]." The worst impacted is Castilla-La Mancha, which was dumped into the junk bond level (Ba2), dropping  by five steps. "The downgrade of Castilla-La Mancha by five notches to Ba2 from A3 reflects recently disclosed features which Moody's considers incompatible with an investment-grade rating," says the Moody's website. The other communities are the Basque Country, Extremadura, Galicia, Comunidad de Madrid, Cataluña, Castilla y León, Murcia and Comunidad Valenciana, all with negative outlooks and because of "growing pressure on liquidity" and "persistent imbalance in their budgets".

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