Lisbon - AFP
The state-backed debt issued by four Portuguese banks suffered a sharp downgrade on Thursday by Moody's rating agency two days after it downgraded Portuguese national debt to junk status. Moody's said it had slashed its rating of debt held by BES and Caixa Geral de Depositis three notches from Baa1 to Ba1, and knocked the debt of private banks Millennium BCP and Banif down four notches to Ba2. The rating cuts -- on debt guaranteed by the Portuguese state -- came with negative forecasts meaning they could be reviewed down further in coming weeks, Moody's said. On Tuesday, Moody's cut Portugal's 10-year sovereign debt by four notches causing Portuguese bond yields to hit record levels and a political uproar in eurozone capitals. The agency said it estimated that Portugal, like Greece, would need a second debt bailout beyond the joint International Monetary Fund and European Union rescue it received in May.