Portugal moves closer to bailout

Portugal's long term government bond rating has been downgraded by Moody's by a notch from A3 to BAA1, the agency said.
 
Moody's cautioned that it expects Portugal to have to look for external help to resolve its crisis.
 
In a statement the agency said: “The limited migration of the rating to BAA1 in today's action reflects Moody's assessment that assistance would be provided by the other members of the Euro zone if Portugal needs financing on an expedited basis before it can obtain funds from the European Financial Stability Facility.”
 
The action, which follows comparable ratings by Fitch and S&P, moves the country closer to junk grade status and places it on review for further downgrades.
 
Moody's said its decision to downgrade “ was driven primarily by increased political, budgetary and economic uncertainty, which increase the risk that the government will be unable to achieve the ambitious deficit reduction targets set out in the update of its stability and growth programme for 2011-2014 which put its finances on a sustainable trajectory.”

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