S&P lowers rating of 5 Spanish banks
Standard & Poor’s has downgraded the credit ratings of five Spanish banks, nearly one month after reducing the Spanish government’s overall rating.
Five banks in Spain have their credit rating cut nearly one month after the nation’s credit rating was downgraded.
Spain’s 5 largest banks have each had their credit rating downgraded amidst fears Greece will exit from the Euro, Standard’s and Poors announced after the close of Wall Street on Friday.
Banco Popular, Bankinter, Banca Civica, and Bankia and its parent company Banco Financiero y de Ahorro were each hit with the downgrade has S&P warned Spain’s economy is likely to continue to contract throughout the rest of 2012 and 2013.
The ratings of Bankia, Popular and Bankinter were each cut from BBB- to BB+ to “junk” status.
Banca Cívica was from BB+ to BB and BFA was cut from BB- to B+, meaning they were already considered “junk” and now they are even more “junk”.
The news comes following the nationalization of Bankia which has been described as Europe’s Bear Stearns moment as fears of debt contagion spread across the Eurozone.
The downgrade raises fears that Spain will have to seek a bailout from the European Central Bank as German Chancellor Merkel and the newly elected socialist French President Hollande clash over plans to combat Europe’s debt crisis.
As the situation in Europe continues to grow worse, well respected news outlets report warnings of ‘Financial Armeggedon’ and ‘widespread civil unrest’ across Europe.