Moody's Announces Slight Downgrade For Portugal

Moody's analysts cut Portugal's sovereign debt rating one notch Tuesday, taking a wait-and-see approach to the financial crisis surrounding the Portuguese debt load. "The limited migration of the rating to Baa1 (and not lower) in today's action, reflects Moody's assessment that assistance would be provided by the other members of the euro zone if Portugal needs financing on an expedited basis before it can obtain funds from the European Financial Stability Facility (EFSF)," Moody's said in a statement. Portugal is embroiled in a political squabble over whether or not to seek – and accept – International Monetary Fund help in relieving their debt problems. Outgoing Prime Minister Jose Socrates resigned after the Parliament could not agree to a more austere budget, and has announced he is opposed to accepting international aid. A new government will not be elected until June 5, leaving investors in limbo and international experts anxious. Analysts expect the new government will seek external aid upon taking office.