Bond rating service Moody’s has downgraded Portugal’s long-term debt to junk status. The news, coupled with Standard & Poor’s warning earlier this week that the current bailout plan for Greece involving the deferment of some debt repayment would be considered a default event, sent chills through the Eurozone.
In its assessment, Moody’s determined that Portugal is facing the same fate as Greece and will require billions in aid to avoid defaulting on its debt. Moody’s based the new rating on its belief that based on the experience with Greece, private investors would come under increasing pressure to accept substantial losses on their investments.
Source: The Guardian
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