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PRESS RELEASE: Moody's Downgrades Spain's Rating To Aa1, Outlook Stable
The following is a press release from Moody's Investors Service: Moody's also downgrades the ratings of Fondo de Reestructuración Ordenada Bancaria (FROB) to Aa1/stable London, 30 September 2010 -- Moody's Investors Service has today downgraded Spain's local and foreign currency government bond ratings by one notch to Aa1 from Aaa. The outlook on the ratings is stable. Today's rating action concludes Moody's review for possible downgrade of Spain's sovereign ratings, as initiated on 30 June 2010. RATINGS RATIONALE The main drivers of Moody's decision to downgrade Spain are as follows: (1) The country's weak economic growth prospects, also relative to Aaa-rated sovereigns, as the process of rebalancing the economy away from the construction and real-estate sectors will likely take several years; (2) The considerable deterioration of the Spanish government's financial strength, as reflected in a more pronounced fiscal deterioration compared to Aaa-rated sovereigns; and (3) Worsening debt affordability (i.e. interest payments as a share of revenues) and significant borrowing requirements, implying that the government remains vulnerable to further episodes of market volatility. At the same time, Moody's has today affirmed Spain's short-term issuer rating of Prime-1 with a stable outlook. Spain falls under the Eurozone's Aaa regional ceilings for bonds and bank deposits, which are unaffected by today's downgrade. Moody's has also downgraded to Aa1/stable outlook from Aaa/review for possible downgrade the rating of Spain's Fondo de Reestructuración Ordenada Bancaria (FROB), whose debt is fully and unconditionally guaranteed by the government of Spain. RATIONALE FOR DOWNGRADE "One of the key drivers for Moody's decision to downgrade Spain's rating to Aa1 is its weak growth prospects and the challenge that this presents for fiscal consolidation," says Kathrin Muehlbronner, a Moody's Vice President--Senior Analyst and lead analyst for Spain. "Over the next few years, the Spanish economy is likely to grow only by about 1% annually on average. Growth rates in the rest of the EU are likely to be higher but also sluggish. Moody's expects growth to average around 2% for the UK, 1½%-2% for Germany and around 1½% for France in the coming years." According to Moody's, raising Spain's low productivity levels and improving international competitiveness will be among the country's key challenges. The rating agency considers the recently introduced labour market reforms and the broad wage restraint in both private and public sectors to be important steps in the right direction. However, dismissal costs will remain above the EU average and wage flexibility more limited than in many Aaa-rated peers. Spain's external imbalances as evidenced by high external debt and a persistent current account deficit are gradually being corrected but still remain larger than they are for most highly-rated peers. Meanwhile, Spain's traditionally high import elasticity will limit the positive contribution of net trade to growth. Moody's also notes that growth will remain moderate due to the ongoing deleveraging of the private sector and the adjustment in the real estate sector where a significant overhang of unsold houses persists and price adjustments have been more limited than elsewhere. Moody's acknowledges that the process to refocus the economy away from the construction and real-estate sectors is under way. The results of the banking sector stress tests in July have confirmed that the Spanish authorities are well advanced in their efforts to strengthen the savings banks' sector. Moody's own analysis suggests that the banking system's capital adequacy can be held to a high standard with little need for additional financial assistance and that it lies fully within the capacity of the sovereign at its new rating level of Aa1. The second driver for the downgrade to Aa1 is the significant fiscal deterioration that Spain experienced and the challeng
PRESS RELEASE: Moody's Downgrades Spain's Rating To Aa1, Outlook Stable
The following is a press release from Moody's Investors Service: Moody's also downgrades the ratings of Fondo de Reestructuración Ordenada Bancaria (FROB) to Aa1/stable London, 30 September 2010 -- Moody's Investors Service has today downgraded Spain's local and foreign currency government bond ratings by one notch to Aa1 from Aaa. The outlook on the ratings is stable. Today's rating action concludes Moody's review for possible downgrade of Spain's sovereign ratings, as initiated on 30 June 2010. RATINGS RATIONALE The main drivers of Moody's decision to downgrade Spain are as follows: (1) The country's weak economic growth prospects, also relative to Aaa-rated sovereigns, as the process of rebalancing the economy away from the construction and real-estate sectors will likely take several years; (2) The considerable deterioration of the Spanish government's financial strength, as reflected in a more pronounced fiscal deterioration compared to Aaa-rated sovereigns; and (3) Worsening debt affordability (i.e. interest payments as a share of revenues) and significant borrowing requirements, implying that the government remains vulnerable to further episodes of market volatility. At the same time, Moody's has today affirmed Spain's short-term issuer rating of Prime-1 with a stable outlook. Spain falls under the Eurozone's Aaa regional ceilings for bonds and bank deposits, which are unaffected by today's downgrade. Moody's has also downgraded to Aa1/stable outlook from Aaa/review for possible downgrade the rating of Spain's Fondo de Reestructuración Ordenada Bancaria (FROB), whose debt is fully and unconditionally guaranteed by the government of Spain. RATIONALE FOR DOWNGRADE "One of the key drivers for Moody's decision to downgrade Spain's rating to Aa1 is its weak growth prospects and the challenge that this presents for fiscal consolidation," says Kathrin Muehlbronner, a Moody's Vice President--Senior Analyst and lead analyst for Spain. "Over the next few years, the Spanish economy is likely to grow only by about 1% annually on average. Growth rates in the rest of the EU are likely to be higher but also sluggish. Moody's expects growth to average around 2% for the UK, 1½%-2% for Germany and around 1½% for France in the coming years." According to Moody's, raising Spain's low productivity levels and improving international competitiveness will be among the country's key challenges. The rating agency considers the recently introduced labour market reforms and the broad wage restraint in both private and public sectors to be important steps in the right direction. However, dismissal costs will remain above the EU average and wage flexibility more limited than in many Aaa-rated peers. Spain's external imbalances as evidenced by high external debt and a persistent current account deficit are gradually being corrected but still remain larger than they are for most highly-rated peers. Meanwhile, Spain's traditionally high import elasticity will limit the positive contribution of net trade to growth. Moody's also notes that growth will remain moderate due to the ongoing deleveraging of the private sector and the adjustment in the real estate sector where a significant overhang of unsold houses persists and price adjustments have been more limited than elsewhere. Moody's acknowledges that the process to refocus the economy away from the construction and real-estate sectors is under way. The results of the banking sector stress tests in July have confirmed that the Spanish authorities are well advanced in their efforts to strengthen the savings banks' sector. Moody's own analysis suggests that the banking system's capital adequacy can be held to a high standard with little need for additional financial assistance and that it lies fully within the capacity of the sovereign at its new rating level of Aa1. The second driver for the downgrade to Aa1 is the significant fiscal deterioration that Spain experienced and the challeng
saila
Moderatore Piazza Affari
Erry, non scherzo, vacci piano oggi, c'è troppa carne al fuoco e sono in congestione da 13 sedute
