S&P says a full Spain bailout would not affect ratings

NEW YORK (Reuters) - Rating agency Standard & Poor's on Wednesday said that Spain's sovereign ratings would be unaffected if the government asks for a full bailout as it struggles to meet its fiscal responsibilities.

Spain has already asked for help for its struggling banks but has so far not asked for a full bailout, even as its 10-year government bond yields pierced 7 percent in recent weeks, a level many consider unsustainable.

"Should Spain decide to request a full bailout, this would, in our view, constitute an official acknowledgement that the government is facing ongoing risks to financing itself in the capital markets at sustainable rates," S&P said in a statement.

"However, we think that the potentially advantageous terms Spain could receive under a full bailout could enhance the chances of success of Spain's already ambitious and politically challenging fiscal and economic reform agenda."

S&P rates Spain BBB-plus with a negative outlook. Moody's Investors Service rates Spain Baa3, and Fitch rates the country BBB. All three of those ratings are investment grade, albeit not by much.

(Reporting By Daniel Bases and Luciana Lopez)

Source: http://news.yahoo.com/p-says-full-spain-bailout-not-affect-ratings-153459929--finance.html