Fitch Ratings has downgraded Greece΄s credit rating to C from CCC Wednesday after confirmation of the second bailout package that includes a debt exchange which will force bondholders to take a loss on their holdings of Greek debt.
According to Dow Jones, the well-flagged downgrade came amid the restructuring process that will see private investors, who own around EUR200 billion of Greek bonds, take steep losses on their holdings as part of the debt deal agreed Tuesday.
Such drastic measures are needed in order for cash-strapped Greece to avert a default next month when EUR14.4 billion of its bonds are due.
The debt exchange is likely to begin soon, with the aim of wrapping it up in early March.
The new ΄C΄ rating is now “indicating that default is highly likely in the near term,” Fitch said.
(source: Dow Jones)
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