U.S. credit rating agency Spain rating cut to BBB-
Baku, April 18 (AZERTAC). The U.S. credit rating agency, Egan, Jones announced on Tuesday to down Spain`s sovereign credit rating from BBB to BBB-, to make it from the junk rating is only one step away, the main reason is that Spain the GDP continued to drop, liabilities have continued to rise. Egan, Jones said, the Spanish government debt levels may be increased further, the government may have to provide more financial support to the banking sector and some financially weak provinces.
The agency pointed out that the high unemployment rate is still one of the important problems facing Spain. The high rate of unemployment has forced the government to pay more for social welfare benefits. At present, Spain is trying to implement fiscal austerity. Under the austerity policy, is difficult to Spain in the next two to three significantly reduce unemployment.
Egan, Jones Spain`s ratings are far lower than Moody`s, S & P and Fitch rating of the country. Egan, Jones three competitors, Moody`s rating on Spain`s lowest, at A3, Egan, Jones estimates that Spain next 2.3 percent of the possibility of debt defaults.
The investors are increasingly worried about the ability of Spain to repay their debts, resulting in significant increase in the yields of the country. According to the Tradeweb the data show, this week, two Spain 10-years Treasury yield reached 5.86 percent earlier in the day once more than 6%.
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