Fitch Research has just downgraded Portuguese sovereign debt to A+ from AA-.
This downgrade puts Portugal's sovereign debt rating only three cuts above junk bond status.
Fitch also placed Portugal on 'Negative Outlook' -- which may mean more downgrades are coming.
Fitch Research announced the downgrade in a news alert on its website.
"Fitch Ratings has downgraded Portugal's Long-term foreign and local currency Issuer Default Ratings (IDR) to 'A+' from 'AA-' and Short-term foreign currency rating to 'F1' from 'F1+'. The agency has simultaneously affirmed Portugal's Euro Area Country Ceiling at 'AAA'. The Outlooks on the Long-term IDRs are Negative," Fitch said.
Just two days ago, on December 21st, Moody's warned of similar ratings cut.
Portugal is considered one of the most financially challenged nations in the 16-nation eurozone. (Check out the latest on credit default swap pricing for Spain, Portugal, Ireland and Italyon our sovereign CDS page
.) There are fears that it could need a bailout similar to those provided to Greece and Ireland. The government of Portugal, however, insists it does not need help.
Click here to read about the banks that are most exposed to the PIIG nation's sovereign debt.
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