Summary Box: High debt, low growth lead to Portugal credit rating cut by Moody’s

Summary Box: Moody’s cuts Portugal’s debt rating

WHAT HAPPENED: Moody’s credit rating agency downgrades Portugal’s bonds, saying it expects the government’s debt situation to continue to deteriorate for at least two to three years.

WHY IT MATTERS: The move deepens the country’s financial woes because foreign lenders will likely demand higher interest returns for the risk of loaning it money.

THE BACKDROP: Portugal’s financial ordeal is part of a debt crisis that has engulfed the eurozone and weighed on the shared currency. Portugal is scheduled to auction at least euro1 billion ($1.25 billion) in bonds on Wednesday. So far this year Portugal has experienced no liquidity problems and no difficulty raising money on international markets.