Global ratings agency, Standard & Poor's has downgraded Spain to the rating by two levels to BBB-, which is just one level above what is considered as the junk level.

Investors concerned over the possibility of a junk status for the country has started a major sell off of the bonds. There are concerns over a non-investment grade being given rot the country in the coming future. Spain's two-year notes fell for the four straight days following the downgrade.

Several investors look at bond indexes to determine investments and a further downgrade to junk could spark a selling by investors in the Spain bond market. Meanwhile, Moody's Investors Service is also looking at the possibility of downgrading Spain to a level below Baa3 level, which is already the lowest investment grade rank given by the agency. Fitch Ratings has assigned a rating of BBB, which is two levels above the junk status.

Experts believe that even the possibility of a further downgrade in Spain's rating by major rating agencies could result in a major selling trend in the bonds market and could significantly increase troubles for the ruling Spanish government, which is aiming to control the difficult economic situation.