14 Jun 2012

Spanish credit rating cut

11:24 am on 14 June 2012

Spain's credit rating has been cut by Moody's to just above junk level status.

The agency downgraded the country from A3 to Baa3 after the US markets closed.

Spain's banks were bailed out by Eurozone countries to the tune of 100 billion euro at the weekend.

Since then, 800 million euros per day is being withdrawn from Spanish banks.

The government now faces its highest borrowing costs in debt markets since joining the euro, as lenders fear for the country's future in the eurozone.

Moody's also downgraded Cyprus, deeper into junk status.

Cyprus is expected to seek a bailout of up to 5 billion euros in order to finance a rescue of its own banks, which are heavily exposed to the Greek banking system.