Moody’s puts Spain on review for possible downgrade

* Spain holds Moody’s debt rating one below top

* Moody’s downngraded Spain from top notch Sep. 30

(Adds comment, background)

MADRID, Dec 15 (BestGrowthStock) – Ratings agency Moody’s said on
Wednesday it has put Spain on review for a possible downgrade
because of its high funding needs, doubts over its banking
sector and concerns surrounding regional finances.

The euro extended the day’s losses on the announcement.

Spain has been under intense scrutiny from international
markets since Ireland was forced to take a 85-billion euro aid
package in November on worries over similarities between the
countries’ property bust and banking systems.

The government has denied it would also need to apply to the
European Financial Stability Facility (EFSF) and rejected any
comparison between its own economic position and Ireland’s.

“Moody’s does not believe that Spain’s solvency is under
threat and in its base case assumptions does not expect the
Spanish government to have to ask for EFSF liquidity support,”
Moody’s lead analyst on Spain Kathrin Muehlbronner said in a
press release.

“However, Spain’s substantial funding requirements, not only
for the sovereign but also for the regional governments and the
banks, make the country susceptible to further episodes of
funding stress.”
(Reporting by Paul Day; editing by Janet McBride)

Moody’s puts Spain on review for possible downgrade