S&P revises Portugal sovereign outlook to negative from watch negative; affirms BB rating
- Removed the ratings on Portugal from CreditWatch negative because the risks that could have led to downgrade Portugal did not materialize in the fourth quarter of 2013. However, the negative outlook reflects the opinion that there is at least a one-in-three possibility that we could lower the ratings on Portugal during 2014.
- Expects net general government debt to peak in 2014
- Country is expected to achieve fiscal deficit target of 5.5% in 2013
- Could lower the ratings if factors affecting Portugal's government debt sustainability markedly worsen due to lower-than-expected growth, slippage in the primary fiscal balance, or the materialization of contingent liabilities.
- Could also lower the ratings if we observe that official support is waning.
- Could lower our ratings on Portugal by more than one notch if we perceive--contrary to our current expectations--that the prospect of private sector involvement via debt restructuring has increased.
- The ratings could stabilize at the current level if the government maintains key program commitments in a timely and predictable manner, such that it can exit its current program and continue to refinance its government debt in the market, with or without continued official support.
- Expects net general government debt to peak in 2014
- Country is expected to achieve fiscal deficit target of 5.5% in 2013
- Could lower the ratings if factors affecting Portugal's government debt sustainability markedly worsen due to lower-than-expected growth, slippage in the primary fiscal balance, or the materialization of contingent liabilities.
- Could also lower the ratings if we observe that official support is waning.
- Could lower our ratings on Portugal by more than one notch if we perceive--contrary to our current expectations--that the prospect of private sector involvement via debt restructuring has increased.
- The ratings could stabilize at the current level if the government maintains key program commitments in a timely and predictable manner, such that it can exit its current program and continue to refinance its government debt in the market, with or without continued official support.