WASHINGTON, June 16: Moody's cut the credit ratings on Friday of Spanish regional governments and several government-related companies, following its downgrade of the country's sovereign debt on Wednesday.

Moody's lowered the ratings of eight regional and local governments and four units of the local governments, while putting all 15 Spanish regions on further warning for downgrades. It also cut by three notches the ratings on two government enterprises — Corporacion de Reservas Estrategicas and Administrador de Infraestructuras Ferroviarias — and put them on review for another cut.

“Friday’s actions follow the weakening of the sovereign's creditworthiness, as captured by Moody's downgrade of Spain's government bond ratings to Baa3 from A3 on 13 June 2012,” the agency said.

The sovereign downgrade on Wednesday came after the government mapped out a deal with the European Union to borrow 100 billion euros ($125 billion) to shore up its banks. Moody's also downgraded or put on warning five utility companies either based in or with exposure to Spain.

Included were Iberdrola and its subsidiary Scottish Power; Italy's Enel and its Spanish unit Endesa; Gas Natural SDG; Enagas; and Red Electrica de Espana.

“Given the multiple channels of contagion that exist between sovereign and corporate issuers, it is challenging for even strong utilities with defensive characteristics to achieve a rating of more than one or two notches higher than the sovereign rating in the country where they are domiciled.”—AFP