RATINGS AGENCY Moody’s downgraded Greece’s credit ratings by three notches today, warning that a Greek debt default is almost inevitable.
Moody’s claims that the recently-agreed EU support package for Greece will constitute a default because it involves the participation of private sector holders of Greek debt and implies that they will “incur substantial economic losses on their holdings of government debt”.
As a result, it cut Greece’s rating three notches to Ca, just one notch above what it considers a default rating.
Eurozone leaders have agreed to provide a second bailout of around €109bn to Greece, while the private sector is expected to contribute about €49.6bn to the debt-laden country.
It its statement today, Moody’s said that the probability of a Greek debt default “is virtually 100 per cent”.
- Additional reporting by the AP
To embed this post, copy the code below on your site
have your say