(MENAFN) Moody's lowered Spain's government bond rating from A3 to Baa3 due to several chief factors, with the possibility to cut the ratings further, reported Xinhua News.
The rating agency stated that the country's debt weight will increase since the government will obtain a USD125 billion loan from the European Financial Stability Facility (EFSF) or from the European Stability Mechanism (ESM) to boost finances of its banks.
However, as the bailout package covers only individual firms, which will be expected to face financial problems again, this means that the country will need money again in the near future.
It is worth noting that the Spanish government dependence on the EFSF or ESM for the recapitalization funds, its increasing reliance on its local banks as the main purchasers of its new bond issues, and the banks obtaining financial support from the ECB, shows that the country has very limited financial market access, according to Moody's.
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