Egan-Jones Slices Spain's Rating Again

Egan-Jones Ratings cut Spain's credit level yet again on Tuesday, the third downgrade from the agency in less than a month as the country's weak banks continue to worry investors.

The firm cut Spain to B from BB-minus.

Much as it did in downgrades last week and in late April, the company pointed to deteriorating public finances and worries that the country will be faced with sizable payments to support its banking sector.

Spain is battling a debt crisis that is shaking its government, banks and companies. The country will soon issue new bonds to fund ailing lenders and indebted regions despite borrowing costs nearing the 7 percent level that drove other states to seek a bailout.

In addition to the shaky public finances, Spain's banks have increasingly rattled global markets. This month Moody's Investors Service carried out a sweeping downgrade of 16 Spanish banks, including Banco Santander, the euro zone's largest bank.

Spain's own sovereign rating has suffered as well. Standard & Poor's cut its credit rating on Spain by two notches to BBB-plus from A last month.

Spain has an A3 rating from Moody's and an A from Fitch Ratings. All three ratings agencies have a negative outlook on Spain's rating.

The country is working to trim spending but economists fret those very austerity measures could delay a return to growth.