Standards & Poor's Rating Services downgraded on Tuesday the Irish government long-term bond rating by one step, to AA- from AA, while keeping the short-term rating at A1+. The outlook is negative, reflecting S&P's view that a possible downgrade for government bonds might be witnessed in the near future.

The current rating is the lowest since 1995, where the company also raised its estimate of recapitalizing the Irish banking sector to €50.0 billion, from the previous €35.0 billion. S&P stated that A further downgrade is possible if the fiscal cost of supporting the banking sector rises further, adding that the debt of Ireland is projected to reach 113 percent of GDP during the upcoming two years.