S&P Cuts Ireland Credit Rating

International ratings agency Standard & Poor's has cut the Irish Republic's sovereign credit rating, citing the country's larger than expected borrowing requirements to finance its troubled banking system.

The credit rating was cut by two notches to A from AA- and the short-term rating was lowered by one notch to A-1 from A-1+. Both were placed on CreditWatch with negative implications, meaning more downgrades are likely.

"The lower ratings reflect our view that the Irish government will have to shoulder additional costs associated with further capital injections into Ireland's troubled banking system," S&P analyst Frank Gill said.

On Sunday, Ireland confirmed that it was applying for a financial rescue package from the European Union and the International Monetary Fund. S&P said the impending bailout had saved the country from a more drastic downgrade.

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