Key can't rule out Moody's downgrade

Prime Minister John Key. Photo / Christine Cornege
Prime Minister John Key. Photo / Christine Cornege

Prime Minister John Key says he cannot rule out a third downgrade of New Zealand by ratings agency Moody's.

He told Radio New Zealand yesterday there was no reason the agency would take a different view from Standard & Poor's and Fitch, which cut their ratings on this country last month, and that if he were a "betting man" he would have his money on a downgrade.

Key's warning came after Moody's downgraded Spain's rating by one notch and warned France that it could face the same fate.

Finance Minister Bill English said ratings agencies were on the move and were putting countries with high levels of debt under the microscope, Radio NZ reported.

Last Thursday, S&P cut Spain's long-term rating to AA- from AA with a negative outlook.

Fitch followed on Friday with a cut by two notches to AA- from AA+.

Earlier this month Moody's slashed Italy's credit rating, following a similar move by S&P in September.

Meanwhile, Fitch cut the debt ratings on government-guaranteed bonds issued by ANZ-National Bank and Westpac yesterday to reflect its downgrade of New Zealand's sovereign rating last month.

The debt was lowered to AA from AA+, the agency said.

The downgrades cover US$2.4 billion ($3.01 billion) of 2012 and 2014 bonds issued by ANZ-National and US$2.5 billion of Westpac bonds of similar maturities.

- Staff reporter, AP, APNZ

- NZ Herald

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