Greece had its credit rating raised by Standard & Poor’s after a debt buyback as the ratings company cited the “strong determination” of euro-area governments to keep the nation in the currency zone.
The grade was lifted from selective default to B- with a stable outlook, S&P said in a statement today. It was cut to SD from CCC on Dec. 5 amid the buyback. The new grade is the highest Greece has had at S&P since June 2011, when it was cut to CCC from B.
“The stable outlook balances our view of euro zone member states’ determination to support Greece’s euro zone membership and the Greek government’s commitment to a fiscal and structural adjustment against the economic and political challenges of doing so,” the ratings company said.
S&P said that Greece’s deficit-reduction plan, which is based on tax increases, improved tax collection, privatizations, and government spending cuts, may still go awry.
“We believe these adjustments carry implementation risks given the projected further output contraction in 2012 and 2013, which will likely see social pressures persist,” S&P said.
(source: Bloomberg)
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