Analysts, who spoke to the STA on condition of anonymity, believe the downgrade was an intentional and orchestrated undermining of Slovenia's dollar bond issue.

The move is also a strong deviation from standard practice of publishing credit ratings, as countries are normally informed about the intention and reasons for changes to credit ratings in advance, the analysts said.

The Finance Ministry does not comment on the situation, while unofficial information suggests that Slovenia intends to continue the dollar-bond issue on Thursday.

According to media reports, demand was high and as much as US$ 6bn were reported to have been listed by the afternoon. While the Finance Ministry was unable to provide any comment regarding the issue, media reported that Slovenia was issuing 5- and 10-year bonds with initial yield guidance around 5% and 6.125%, respectively.

The issue was suspended just before the book was to be closed at 4:30 PM and the final price for the bond issue was to be set after the news broke of a possible downgrade.

The rating agency based the downgrade on "the state of Slovenia's banking sector", "the marked deterioration of Slovenia's government balance sheet" and the "uncertain funding prospects that heighten the probability that external assistance will be needed". The outlook remains negative.

The key reason for the downgrade was an "ongoing turmoil in the country's banking system and the high likelihood that the sovereign will be required to provide further assistance and capital injections". Asset quality at the banks deteriorated considerably in 2012 and continued to deteriorate since, said Moody's.

The state has been injecting capital and providing assistance to the three largest banks since 2011, and Moody's expects bank asset quality to continue to deteriorate given the weak economic environment.

Moody's said that the economy entered recession once again in 2012, contracting by 2.3% as a result of the banking crisis, and the agency forecasts that the economy will contract by a further 1.9% in 2013 before a weak recovery in 2014 when growth is expected to reach 0.2%.

"Risks remain skewed firmly to the downside and the economic outlook will depend to a large degree on the stabilization of the banking crisis", Moody's said.

Moody's credit rating for Slovenia is much lower than the ratings by the other two main agencies, Fitch and Standard & Poor's, which place Slovenia in the upper medium grade.