Moody’s Downgrades Greece’s Gov't Bond Rating to Caa2, Outlook Negative

Moody's rating agency has lowered the government bond rating of Greece from Caa1 to Caa2 with a negative outlook, citing "high uncertainty" over whether the country's authorities would be able to agree with the creditors in due time.

MOSCOW (Sputnik) – Moody's added that even if Greece does sign a deal with the international creditors, it could be at risk of a default during the implementation of a follow-up financing program because of its "weakened economy and a fragile domestic political environment."

"The negative rating outlook reflects Moody's view that the balance of economic, financial and political risks in Greece is slanted to the downside," the rating agency said in a Friday statement.

Moody's also downgraded Greece's local and foreign-currency bond ceilings to B3 from Ba3 and lowered the country's local and foreign-currency bank deposit ceilings to Caa3 from Caa1 on Friday.

"The probability of a default on official sector, and hence the increasing risk of default on private sector debt, continues to rise with every week that passes without some form of resolution," the rating agency stressed.

Greece's debt to the troika of international creditors (International Monetary Fund, European Union and European Central Bank) amounts to some $270 billion.

The current aid package for Greece expires at the end of June. The country's authorities are hoping reach a new bailout deal with the troika by May 12.

In February, EU finance ministers agreed to extend Greece's bailout for four months, provided that the country implement a range of reforms. Greece needed to come up with a reform plan before April 24 in order to unlock its next tranche of aid, amounting to $7.8 billion, however, it still cannot agree with the lenders on a number of reform issues, including pensions and taxation.