MADRID -- Spain's key borrowing rate hit a fresh high Thursday not seen since the country joined the euro in 1999, after a credit ratings agency downgraded the country's ability to just above junk status amid rising fears a bank bailout may not be enough to save the country from economic chaos.
The interest rate – or yield – on the country's benchmark 10 years bonds rose to a record 6.96 percent in early trading Thursday, close to the level which many analysts believe is unsustainable in the long term and the rate that forced Greece, Ireland and Portugal to seek bailouts of their public finances.
The ratings agency Moody's downgraded Spain's sovereign debt three notches from A3 to Baa3 Tuesday night, leaving it just one grade above "junk status".