Italy’s Credit Rating Cut to BBB by S&P; Outlook Stays Negative

Italy’s credit rating was lowered to BBB, or two levels above junk, by Standard & Poor’s because of expectations for a weakening of economic prospects and the nation’s impaired financial system.

The outlook on the rating, reduced from BBB+, remains negative, the New York-based ratings company said in a statement late yesterday. S&P analysts said that, even with unprecedented easing by the European Central Bank, real interest rates for non-financial companies in Italy exceed the level before the financial crisis.