The region's long-term issuer debt rating was ket at Ba3, which was three notches below the investment grade threshold, which marks the minimum grade required of most institutional investors in order to purchase or hold it.

Analysts at Moody's argued that the Spanich central government's reinforced control of the autonomous region after article 155 of the country's constitution was triggered compensated for the "idiosyncratic" risks inherent to Catalonia, especially the "deteriorating" business climate.

Specifically, enhanced control of Catalonia's finances led Moody's to believe the government in Madrid would cover the region's debt servce payments.

The so-called 'outlook' for the rating, which denotes the likelihood of further upgrades or downgrades in the near-term, was kept at 'negative'.

In the same report, published overnight, Moody's further pointed out that while the region's financial performance improved in 2016 it remained "fundamentally weak", highlighting the "very high" debt burden , with net direct and indirect debt to operating revenue of 300%.

Catalonia's economic environment was also described as "rapidly deteriorating" in the aftermath of regional officials decision to issue a unilateral declaration of independence and the escalation of tensions with the State which ensued.

Regarding the still negative outlook, Moody's pointed said the outcome of the 21 December elections remained "uncertain" due to the very tense political climate.

As well, unknowns remained around the Madrid government's ability to implement article 155 of the constitution, which allows for the temporary suspension of any Spanish region's autonomy.