Moody's says Portugal will need assistance

LISBON, Portugal, April 5 (UPI) -- Moody's Investors Service said Tuesday that Portugal required an international bailout, similar to loans provided to Greece and Ireland.

Portuguese Prime Minister Jose Socrates resigned in late March after failing to convince parliament to pass a third round of budget cuts. As such, Moody's warned that the new government would need to pursue international assistance "as a matter of urgency," The New York Times reported.

Moody's dropped its rating for Portugal's long term bonds from A3 to Baa1, but said it would review Portugal's finances soon, likely for another rating cut.

Moody's has Portugal's benchmark bonds at three levels above junk status. Rival ratings firm Standard & Poor's has already rated the country's debt at BBB minus, which is one level above junk status, the newspaper said.

The situation is considered "urgent" as $13 billion in Portuguese debt is scheduled to mature in April and June.

In Lisbon, interest on benchmark 10-year notes reached 8.43 percent, while 2-year bonds are yielding 8.6 percent.

Officials have said the government cannot keep up payment on yields above 7 percent for long.