05 APR 2011
• Moody's cuts debt to just three places above junk
• Yields on five-year bonds hit 10%
• Portugal must refinance €4.3bn of debt this month
By Graeme Wearden | The Guardian
Portugal moved closer to the brink of a financial rescue package on Tuesday after Moody's downgraded its debt, pushing its bond yields near to those of Ireland.
Moody's cut its rating on Portugal's sovereign debt by one notch from A3 to Baa1, just three places above junk. It warned that Portugal is rapidly approaching the point where it will be unable to finance itself.
"Moody's believes that the government's current cost of funding is nearing a level that is unsustainable, even in the short-term," it explained.
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Portugal’s bond yields near 10pc as investors price in EU bailout