Spanish government bonds downgraded by Moody’s (MarketWatch) (10-03-2011)

TEL AVIV – Spanish government-bond rating was downgraded one notch to Aa2 from Aa1 by Moody’s, which placed a negative outlook on the new rating.

The credit-rating company expects the country's bank restructuring will cost more than the government currently expects, leading to a further increase in the public-debt ratio.

Moody's remains concerned about whether the central government will be able to make the necessary sustainable and structural improvement in general government finances, given the limits of central-government control over the regional governments' finances as well as the background of only moderate economic growth in the short-to-medium term.

The rating cut concludes the review Moody's undertook on Dec. 15.

Source: MarketWatch