Associated Press/CBS News
March 2, 2011
Both Portugal and Greece could see their debts further downgraded in the next two months, ratings agency Standard & Poor's warned Wednesday, depending on what happens at a crucial European leaders' summit later this month.
The agency said in a report it is maintaining its A- rating on Portugal and its BB+ rating on Greece but has kept both countries on so-called "CreditWatch with negative implications."
Heavily indebted Greece accepted an EU-IMF bailout last year, as did Ireland, and ailing Portugal is widely expected to follow suit even though it managed to raise another euro1 billion ($1.38 billion) at a bond sale Wednesday.
S&P said it could lower the ratings on both Portugal and Greece within the next two months after analyzing an expected new European bailout mechanism. EU policymakers are to decide later this month on the key features of the European Stability Mechanism, which will replace the current European Financial Stability Facility from 2013 on.
The agency said it was unlikely that either rating would be cut by more than two notches. Even if Portugal was downgraded two notches it would still be investment grade, while Greece's debt is junk status already.
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