Moody’s cuts Spanish ratings

CREDIT rating agency Moody’s downgraded 30 of Spain’s smaller banks yesterday over concerns the nation’s high sovereign debt may prevent it from bailing them out in future.

It cut the ratings of 15 banks’ senior debt and deposit ratings by two notches and five by three or four, it said, with most banks’ outlook negative. The move reflects the removal of the “extraordinary level of systemic support – of up to six notches” that Moody’s had built in to their ratings.

The re-ratings do not affect Spain’s three largest banks, Banco Santander, BBVA and La Caixa, it said.