Global ratings agency Moody’s downgraded the credit ratings of 28 Spainish banks a week after Spain asked for money to aid them. As per the Moody’s Spain’s declined creditworthiness means a fragile credit profile for Spanish banks.
Among those who have been downgraded is Banco Santander. Its long-term rating has been slashed to BAA 2 from A3 and that may further downgrade. But Santander is still one notch above the sovereign rating of BAA3, because of the bank’s geographic diversity and its manageable exposure to Spanish sovereign debt.
- Spain had formally asked for monetary help to aid its banks after an independent audit of Spain’s banks discovered that they will require up to 62 billion euros additional funding.
- European authorities had already agreed to provide up to 100 billion euros ahead of assessments of the banks’ needs.