As many parts of Europe are struggling to keep their economies alive, Spain is facing a significantly rough patch right now with two of their largest cities, Madrid and Barcelona, seeing their Standard & Poor ratings lowered, which could have quite a negative impact on the country as a whole.
-- We lowered our sovereign ratings on Spain to 'BBB-/A-3' from 'BBB+/A-2' and assigned a negative outlook to the long-term rating on Oct. 10, 2012.
-- We cap the ratings on the Spanish cities of Barcelona and Madrid at the level of the long-term sovereign rating because, under our criteria, these two local and regional governments (LRGs) do not meet the conditions to be rated higher than the sovereign.
-- Consequently, we are lowering our long-term ratings on these two LRGs to 'BBB-' from 'BBB+' and lowering our short-term rating on Madrid to 'A-3' from 'A-2'.
-- The negative outlooks on the two LRGs reflect the negative outlook on