Baku, May 1 (AZERTAC). Egan-Jones Ratings downgraded Spain`s credit level on Monday, the latest blow for the euro zone country, which slid into recession in the first quarter as austerity measures ate into growth.
The firm cut Spain to BB-plus from BBB-minus, citing the country`s "miserable trend" of economic contraction in recent years.
Last week Standard & Poor`s cut its credit rating on Spain by two notches to BBB-plus from A, citing expectations public finances will deteriorate even more than previously thought on the contracting economy and an ailing banking sector.
Spain has an A3 rating from Moody`s Investors Service and an A from Fitch Ratings. All three ratings agencies have Spain with a negative outlook. Spain has seen its 10-year borrowing costs hover around 6 percent in recent months, a level that many analysts say is unsustainable. The country is working to trim spending - but those very measures could delay a return to growth until late this year or beyond, economists say.
Egan-Jones highlighted the risks to the Spanish banking sector on Monday, noting that "Spain is likely to be faced with payments to support a portion (of) its banking sector and for its weaker provinces; ... watch for requests for support from the banks."The U.S. Securities and Exchange Commission earlier this month charged Egan-Jones and its president, Sean Egan, with making false statements in a 2008 application to the agency to rate certain securities. Egan has said the company will fight the charges.
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