Moody cuts ratings credit adverse Portugal

Portuguese flags is seen on the meeting room in Lisbon on June 16, 2011.

Credit: Reuters/Jose Manuel Ribeiro

NEW YORK | Tue, July 5, 2011 2 pm EDT

NEW YORK (Reuters) - Moody Tuesday investors Service rating of credit of the Portugal crossed into junk territory, saying: there is great risk for the country will need to a second round of funding official before it can return to the capital markets.

The increased concerns that Portugal will not be able to fully achieve the reduction of the deficit and debt stabilization targets set out in the agreement of loan with the European Union and the Monetary Fund International weighed on the decision of Moody.

He is also a growing probability that Portugal will not be able to borrow at rates sustainable in capital markets in the second half of 2013 and some time later, Moody said.

Portugal is facing considerable challenges in reducing spending, increase compliance with tax, economic growth and support of the banking system, the Agency said.

The Coupe Moody rating credit of the Portugal by four levels of Ba2. This is the first of the three major agencies ratings to the credit of the Portugal in junk status. Standard & Poor and Fitch Ratings have Portugal to BBB-minus, at the bottom of the range of investment grade.

(Reporting by Walter Brandimarte and Daniel Bases;) (Editing by Leslie Adler)