Moody's Downgrades Portugal's Debt

Reuters reports:

Moody's on Tuesday cut Portugal's credit standing to junk in the first such move by a ratings agency and warned the country may well need a second round of rescue funds before it can return to capital markets.

Moody's Investors Service slashed Portugal's credit rating by four levels to Ba2, making it follow Greece into junk territory below investment grade.

It cited heightened concerns that Portugal will not be able to fully achieve the deficit reduction and debt stabilization targets set out in its loan agreement with the European Union and International Monetary Fund.

There also is an increasing probability Portugal will not be able to borrow at sustainable rates in capital markets in the second half of 2013 and for some time thereafter, Moody's said.