March 8th, 2011
Econintersect: Moody's Investors Service downgraded Greek debt Monday (March 7) to B1 from Ba1, which is lower than Egypt. Moody's said it may cut further, drawing an indignant protest from the Greek Finance Ministry.
The credit rating owngrade was by three levels, increasing the probability that Greece may have to restructure its debt within the next two years. Follow up:
Follow up:The move increased pressure on Eurozone leaders to ease repayment terms on bailout loans to Athens, just as Germany and its allies seem to have turned their backs on more radical steps to help it reduce its debt through bond purchases or buy-backs.
From Yahoo News:
"The likelihood of a default or distressed exchange has risen since its last downgrade of the Greek government debt rating in June 2010," Moody's said in a statement.
The downgrade sent a ripple of anxiety around credit markets, raising the price of insuring Greek, Portuguese and Spanish debt against default and the risk premium on holding Greek bonds rather than benchmark German bunds.
Source: Yahoo News (Reuters)