(NEW YORK) – Standard and Poor’s downgraded its rating on Spain’s debt Wednesday. In a statement, S&P cited rising unemployment, spending constraints, social discontent among regional and national governments, and doubts over the Eurozone’s commitment to backing Spain’s recapitalization as reasons for the downgrade.
As a result, the country’s short- and long-term sovereign credit ratings now stand at “BBB-/A-3” — down from “BBB+/A-2,” which is just above junk status.
It was a move anticipated by industry experts, after Moody’s downgraded Spain’s sovereign credit as well.
Global markets, including markets in the U.S., traded lower Wednesday. The downgrade announcement may impact Spain’s borrowing costs, which could alarm stock markets in trading on Thursday.
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Matt McFarland, CNN
Kathryn Vasel, CNN
Alanna Petroff, CNN