S&P Cuts Portugal Ratings On Debt Concerns

Standard & Poor's Corp. cut Portugal's credit ratings by two-notches Tuesday, saying it expects the nation's government to struggle to stabilize its relatively high debt ratio until 2013.

In response, the euro fell against the dollar and U.S. Treasurys moved higher.

The cost of insuring Portuguese bonds against default rose in reaction to the news, with the annual cost of protecting $10 million of Portuguese debt against default for five years hitting $365,000, up from $343,000 before the announcement and $311,200 at Monday's close, according to CMA Datavision.

In fact, Portuguese credit default swaps have pushed sharply higher in the last few days on fears that the situation in Greece may spill over into other euro-zone nations judged to be facing a similar fiscal predicament, although some say the nation is better-positioned to fix its finances than Greece.

Read Full Article from Wall Street Journal

- Posted: 2010-04-27 12:12:42

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