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 Spain’s credit rating was cut for the third time in three years by Standard & Poor’s as slowing growth and rising defaults threaten banks and undermine efforts to contain Europe’s sovereign-debt crisis, writes Bloomberg.

The ranking was reduced by one level to AA-, S&P’s fourth- highest investment grade, with the outlook remaining negative, the rating company said in a statement yesterday. Fitch Ratings downgraded Spain to the same level on Oct. 7, when the company also cut its rating on Italy.

“Despite signs of resilience in economic performance during 2011, we see heightened risks to Spain’s growth prospects,” S&P said. “The financial profile of the Spanish banking system will, in our opinion, weaken further, with the stock of problematic assets rising further.”