Slovenia downgraded to junk by Moody`s
Baku, May 1 (AZERTAC). Slovenia`s credit rating was on Tuesday downgraded to junk by Moody`s rating agency, forcing the tiny eurozone state, which is battling to avoid an emergency bail out, to stall plans for raising debt in US dollar markets.
Moody`s said it was lowering the Alpine country`s rating from Baa2 to Ba1 because of the weak state of its banking system, deteriorating public finances and increased chance of requiring an international rescue. It kept the country on “negative outlook”, meaning a further downgrade is possible.
“There is increased probability that external support, external assistance will be required,” warned Yves Lemay, managing director for European sovereigns at Moody`s.
Despite its small size - its population is just 2m - Slovenia has attracted the attention of financial markets amid fears that the country will become the sixth eurozone member to require European financial support.
Moody`s announcement interrupted an investor roadshow for a planned issue of US dollar denominated bonds, which Slovenia`s newly-elected government hopes will avoid the country having to seek external help.
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