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Moody's downgrades Portugal on fear of 2nd bailout
Stock Market News |
2011/07/05 12:23
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Ratings agency Moody's downgraded Portugal's government debt on Tuesday, citing growing risks the country will require a second rescue package because it cannot meet its debt reduction targets.
Moody's Investors Service cut its rating by one notch to Baa2 from Baa1 and said in a report that it was increasingly unlikely that Portugal would be able to borrow money on capital markets in 2013, as planned.
As a result, it said the country would probably require more financial aid -- on top of the euro78 billion ($113 billion) bailout it received earlier this year -- with private banks taking some losses.
The Portuguese government said in response that it is fully committed to meeting debt reduction targets and economic reforms tied to the bailout.
Portugal has been shut out of bond markets for long-term loans since April, when its government collapsed, heightening investors' concerns about its financial future.
Moody's said the European Union's insistence on involving private sector holders of Greek debt in a second bailout for the country indicates the same would happen for Portugal.
The agency's report is a blow to Portugal as it tries to distance itself from Greece, which has had to redouble painful austerity measures because it did not meet debt reduction targets.
Moody's said Portugal faces huge challenges in reducing spending and tax evasion, achieving economic growth and supporting the banking system and did not exclude another rating cut.
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Investment Fraud Litigation |
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Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws. Securities Arbitration. Generally speaking, securities fraud consists of deceptive practices in the stock and commodity markets, and occurs when investors are enticed to part with their money based on untrue statements.
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