NEW YORK ( TheStreet) -- Spanish banks received their promised downgrade Thursday as Moody's Investors Services made good on its promised review of the suffering European financial sector. Sixteen Spanish banks were downgraded Thursday, in addition to the U.K. subsidiary of giant Banco Santander (Spain) SA. Altogether, ratings declined by one grade for five banks, by two notches for three banks and by three notches for nine banks, Moody's said. In addition, ten banks remain on a "negative" outlook with the remainder "remain on review for further downgrade. Ratings for Spanish banks reviewed by Moody's now range between A3 and Ba3. "This average is below most Western European banking systems, reflecting the severe impact of both the difficult domestic environment and the ongoing euro area debt crisis on Spanish banks," according to a Moody's statement. The rating agency cited several factors for the downgrade, including the rapid decline in asset quality, the possible downgrade of Spanish sovereigns and the possibility of the banks being cut off from private market funding. The Spanish banks join 26 Italian banks that were cut on May 14. Moody's announced in April that it plans review the creditworthiness of all Western European banks beginning this month and ending in June. -- Written by Christopher Westfall in New York.