S&P Places Portugal's Sovereign Ratings on CreditWatch Negative
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S&P placed its A- long-term and A-2 short-term sovereign credit ratings on Portugal on CreditWatch negative this afternoon.
S&P credit analyst Frank Gill said, "The CreditWatch placement reflects our view of increased risks to the government's creditworthiness. These risks stem from uncertainty about the government's possible recourse to official funding and the consequences that obtaining such funding could have for the position of private-sector creditors vis-a-vis official creditors after 2013."
The S&P report also stated, "In addition to what we view as the economy's weak growth prospects, the large stock of Portuguese debt that non-residents hold (54% of GDP) has increased the government's vulnerability to rising real interest rates. This contributes to the country's large gross external financing needs and, we believe, raises the likelihood that Portugal will seek external assistance from the EU."
S&P credit analyst Frank Gill said, "The CreditWatch placement reflects our view of increased risks to the government's creditworthiness. These risks stem from uncertainty about the government's possible recourse to official funding and the consequences that obtaining such funding could have for the position of private-sector creditors vis-a-vis official creditors after 2013."
The S&P report also stated, "In addition to what we view as the economy's weak growth prospects, the large stock of Portuguese debt that non-residents hold (54% of GDP) has increased the government's vulnerability to rising real interest rates. This contributes to the country's large gross external financing needs and, we believe, raises the likelihood that Portugal will seek external assistance from the EU."
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