NEW YORK (

TheStreet

) -- Ratings agency Moody's placed Portugal's A1 rating on review for a possible downgrade.

Moody's warned it could downgrade the debt a notch or two.

The agency cited "uncertainties about Portugal's longer-term economic vitality" and high borrowing costs.

"In Moody's opinion, Portugal's solvency is not in question," said Anthony Thomas, Moody's lead analyst on Portugal. "But the likely deterioration in debt affordability over the medium term and ongoing concerns about the economy's ability to withstand fiscal consolidation and private sector deleveraging mean its outlook may no longer be consistent with an A1 rating."

Moody's warning to Portugal comes after the agency last week slashed Ireland's rating by five notches and also warned Spain of a possible downgrade.

-- Written by Joseph Woelfel

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