In our opinion, Spain is likely to have an extended period of subdued economic growth, which weakens its budgetary position. We are lowering our long-term rating on the Kingdom of Spain to 'AA' from 'AA+'. The negative outlook reflects the possibility of a downgrade if Spain's budgetary position underperforms to a greater extent than we currently anticipate. On April 28, 2010, Standard&Poor's Ratings Services lowered its long-term sovereign credit rating on the Kingdom of Spain to 'AA'. At the same time, the 'A-1+' short-term sovereign credit rating was affirmed. The outlook is negative. Standard&Poor's transfer and convertibility assessment is unchanged at 'AAA'. The downgrade primarily reflects Standard&Poor's downward revision of its medium-term macroeconomic projections.
