Moody's Puts Spain on Review, May Cut Rating By Two Levels

Moody's Investors Service said it is reviewing Spain's credit ratings and may cut them by one or even two levels as the country's fiscal problems bite and the prospects for economic growth weaken.

The rating agency said it was conducting a three-month review of Spain's Aaa foreign and local currency sovereign bond ratings, Reuters reported.

Following the crisis in Greece, many have speculated that Spain will be the next casualty of Europe's fiscal problems. Spain's government has denied that it has problems acquiring funding.

In an interview with Reuters, Moody's senior risk analyst Kathrin Muehlbronner emphasized that Spain is a highly-rated country.

"People forget really what a gulf there is between Spain and Greece," Muehlbronner told Reuters. "Spain is a very highly credit worthy country."