On Slovenia's part, the issue continues and is not suspended, the ministry said, but refused to give any additional explanations due to US regulation regarding such financial transactions.

The rating agency unexpectedly downgraded Slovenia's credit rating from Baa2 to high-risk Ba1 with a negative outlook.

It 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 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".

Slovenia's ratings by the remaining two big agencies, Fitch and Standard & Poor's, remain in the upper medium grade.

Due to the downgrade, Slovenia was forced to suspend the issue just before the final price was set for 5- and 10-year dollar bonds with initial yield guidance around 5% and 6.125%, respectively.

Unofficially, the bond sale was going well and media reports suggest orders amounted to USD$6bn. Slovenia was planning to issue up to USD$3bn in bonds.

Some analysts believe that Moody's move was an intentional and orchestrated undermining of Slovenia's dollar bond and that it was a deviation from the standard practice, when countries are informed about a potential change in rating in advance.

Others meanwhile believe that the Finance Ministry knew about the potential downgrade and wanted to sell the bonds before it was published.

Moreover, the Wall Street Journal quoted Yves Lemay, managing director for Europe-Middle East-Africa sovereigns at Moody's saying that the firm followed its usual procedure of informing Slovenia's government before publicly announcing the downgrade.

The Finance Ministry issued no comment about whether they knew about the downgrade, according to the web site of the business daily Finance.

Under existing EU regulation, countries must be informed about the change in debt rating 12 hours in advance.

The European Commission does not comment on the downgrade, the press officer of Commissioner for Monetary and Economic Affairs Olli Rehn told the STA last night.

Opposition Democratic Party (SDS) head and former Prime Minister Janez Janša tweeted today that foreign capital markets love irrational leftist governments taking out expensive loans and that this bond sale will cost Slovenia EUR 800m in ten years.

He wonders why the government decided to issue bonds before changing the Constitution and fixing systemic risks and whether changes to referendum legislation will allow Slovenia to get less expensive loans.

Moreover, the former PM wonders whether the government's move was nothing but a plan to find an excuse to reject the proposal to have the fiscal rule implemented in 2015 if the bond sale is a success.

The head of opposition People's Party (SLS), Franc Bogovič, meanwhile called on the government to stop the bond sale until it drafts a plan of anti-crisis measures and send it to the European Commission on 9 May.

"Only then will the government be able to step in front of foreign investors with credibility and show that the country has a feasible vision on how to consolidate public finance, implement certain reforms, launch a new round of privatisation, restructure the banking system and boost the economy."