Moody’s pushed Greece down to a single notch above default at Ca on Monday after the deal put together to rescue Athens from its debt woes proved unacceptable to the ratings agency.
The plan would involve private investors, lower interest rates, and longer repayment schedules, and according to Moody’s will make a default practically inevitable.
Reuters reported that Moody’s said, “The announced EU [European Union] program along with the Institute of International Finance’s statement implies that the probability of a distressed exchange, and hence a default, on Greek government bonds is virtually 100%.”
While Moody’s and Fitch Ratings both said they would reassess and rerate once the bond exchange is completed, Moody’s refused to say when it might consider elevating Greece’s assessment. Fitch, on the other hand, has promised it will act quickly to raise Greece’s rating to a higher “low speculative grade” once the bond exchange has been completed.