Moody’s Investors Service said its review of Spain’s debt rating for a possible downgrade will likely continue through September.
The review, which started June 13, is dependent on the scope of the nation’s bank recapitalization, support available under the European Stability Mechanism and potential changes to the region’s existing crisis-management framework, the New York based ratings firm said in a statement today. Moody’s reduced Spain to its lowest level of investment grade on June 13, cutting it three steps to Baa3 from A3.
Prime Minister Mariano Rajoy delayed seeking a second rescue for Spain while pledging to continue bailing out its regions as Valencia requested more money to settle bills and cover debt.
Rajoy spoke today following a meeting in Madrid with French President Francois Hollande. Catalonia, Valencia and Murcia this week claimed more than half of an 18 billion-euro ($23 billion) fund announced by Rajoy last month to help the regions face bond redemptions and finance their deficits in the second half.
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