Spain faces Moody's downgrade

Credit rating agency Moody's has placed Spanish government bonds under review for downgrade on concerns the country will face difficulty raising cash next year.

Moody's, which downgraded Spain from AAA to AA less than three months ago, released a statement this morning saying it was putting Aa1 ratings for local and foreign currency government bond on review for possible downgrade. The problems in the savings banks and large debt held by the country means it may be tough to raise large sums of money in 2011, the FT reports. It also says weak economic growth, the cutting of the budget deficit and higher borrowing needs were a cause for concern. Meanwhile Moody's is also reviewing the rating of the Spain's Fund for Orderly Bank Restructuring.