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Portugal Bonds Hurt by Politics May Face QE Eligibility Headwind

  • Nation may lose crucial investment-grade rating on DBRS review
  • ECB could still get waiver to keep buying, Commerzbank says

Portugal’s government bonds, the worst performers in the euro zone over the past month, face another hurdle with a potential credit-rating downgrade that may see them excluded from the European Central Bank’s asset-buying program.

For Portugal’s bonds to be eligible for purchase, the nation must be rated investment grade by at least one major ratings company. It has already been junked by Moody’s Investors Service, Standard & Poor’s and Fitch Ratings.