Plans to bridge the country’s funding gap are likely to result in “one or more defaults”, the agency said as it lowered Greece’s rating to CCC from B. That is a worse rating than Ecuador and Pakistan, the Times reports.
Yesterday, S&P warned efforts to push some of the burden of the Greek crisis on to the private sector were likely to impose terms less favourable than the debt being refinanced.
It said: “The downgrade reflects our view that there is a significantly higher likelihood of one or more defaults, as defined by our criteria relating to full and timely payment, linked to efforts by official creditors to close an emerging financing gap.”
Greece’s cost of borrowing jumped on the back of the news, with yields on ten-year bonds touching 17%.
