Standard and Poor’s Ratings Services cut Portugal’s sovereign credit rating to BBB- from BBB on Tuesday, leaving it just one level above junk status. The downgrade came just four days after the agency lowered the European nation’s rating to BBB from A-. The Rating Service removed the country from CreditWatch with negative implications, but the outlook for the rating is still negative, the S&P said. The agency also cut Greece’s rating to BB- from BB+, and that country remains on CreditWatch with negative implications. S&P cited last weeks’ EU summit, which confirmed expectations that sovereign debt restructuring may be a potential prerequisite for borrowing from the European Stability Mechanism, which is set to replace the EU’s existing emergency rescue fund in 2013.
