Three Not So Little 'PIIGS Nations' Slashed by Fitch Ratings Friday

The following are passages released by Fitch Ratings regarding its six-nation credit downgrade timed with the end of the U.S. business day Friday:

"Fitch Ratings has today concluded its review of the six eurozone sovereigns it placed on Rating Watch Negative (RWN) on 16 December 2011.

The rating actions on the long-term Issuer Default Ratings (IDRs) are as follows:
  • Belgium downgraded to 'AA' from 'AA+'; Negative Outlook;
  • Cyprus downgraded to 'BBB-' from 'BBB'; Negative Outlook;
  • Ireland LT IDR affirmed at 'BBB+'; Negative Outlook;
  • Italy LT IDR downgraded to 'A-' from 'A+'; Negative Outlook;
  • Slovenia LT IDR downgraded to 'A' from 'AA-'; Negative Outlook;
  • Spain LT IDR downgraded 'A' from 'AA-'; Negative Outlook;

"Today's rating actions balance the marked deterioration in the economic outlook with both the substantive policy initiatives at the national level to address macro-financial and fiscal imbalances, and the initial success of the ECB's three-year Long-Term Refinancing Operation in easing near-term sovereign and bank funding pressures. Nonetheless, the intensification of the euro zone crisis in the latter half of last year undermined the effectiveness of ECB monetary policy and highlighted the financing risks faced by eurozone sovereign governments in the absence of a credible financial firewall against contagion and self-fulfilling liquidity crises."

Source: Fitch Ratings

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