By Maria Armental

Moody's Investors Service on Friday upgraded Portugal's credit rating one notch to Ba1, citing the country's improved fiscal condition and an expected continued gradual reduction of the country's "very high public debt burden.

The outlook is stable, Moody's' said. Ba1 is one notch below investment-grade.

But there was some concern. "Moody's believes, however, that Portugal's credit metrics remain inconsistent with an investment-grade rating," the company said, noting the action concludes the review for upgrade it had initiated on May 9.

Portugal's credit profile is now aligned with its Ba1-rated European peers,including Slovenia and Croatia, though the latter has a negative outlook.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

July 25, 2014 17:15 ET (21:15 GMT)

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