NEW YORK (

TheStreet

) -- Standard and Poor's Rating Services downgraded the long-term sovereign credit rating of Belgium by a notch to double-A, citing risks to its financial sector.

"What we see as renewed funding and market risk pressure, which is increasing the perception of difficulties in the Belgian financial sector and in our opinion raising the likelihood that the sector will require more sovereign support," the ratings agency said in its statement. "This, in turn, increases the likelihood that contingent liabilities will crystallize on the sovereign's public balance sheet, in our view."

Belgium is expected to end the year with a debt-to-GDP ratio of 97%, and this could climb above 100% if the government has to bail out the financial sector.

S&P said Belgium's economic growth outlook was weak, given that exports account for 80% of GDP.

The firm also said its outlook is negative. "We could lower the ratings further if, consistent with our hypothetical downside scenario, net general government debt were to increase above 100% of GDP, as a consequence of rising economic and fiscal pressures -- among other things, due to the continuation of political uncertainty -- or reflecting the crystallization of contingent liabilities," S&P said.

Belgium is due to auction securities, including 10-year debt, on Monday, Nov. 28.

The downgrade was announced after European market trading hours. In the U.S., stocks fell slightly following the news.

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-- Written by Shanthi Bharatwaj in New York

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