Standard & Poor’s has downgraded Greece’s debt rating from CCC to CC, a move which places the country just two notches above default.
The ratings agency has also moved its outlook on Greece to negative, citing the restructuring plan as a selective default.
S&P says: “The proposed restructuring of Greek government debt would amount to a selective default under our rating methodology. We view the proposed restructuring as a ‘distressed exchange’ because, based on public statements by European policy makers, it is likely to result in losses for commercial creditors.”
Moody’s downgraded Greece by three notches on Mondya, while Fitch ratings agency also cut Greece’s rating by three levels on July 13, 2011.