15-Jun-2010 12:52 PM

Moody's downgrades Greece's sovereign rating to 'junk' status

Greece's Finance Ministry rejected a decision by Moody's Rating Agency to downgrade the country's sovereign rating from 'A3' to 'BA1', stating, "this downgrading in no way reflects the progress we have made in the last few months, nor the opportunities opened by our budgetary stabilisation and the improvement of our country's competitiveness" (AFP/Businesswire, 15-Jun-2010). The ministry added that its budgetary measures "showed very clearly" that Greece was meeting the requirements of the EU and IMF, which have together provided the country with a EUR110 billion bailout. Moody's stated it downgraded the rating by four notches to "junk" status on concerns about how it will repay its debts, commenting, "this uncertainty represents a risk that leads Moody's to believe that Greece's creditworthiness is now consistent with a Ba1 rating, a rating which incorporates a greater, albeit, low risk of default". The outlook is "stable". Greece already has a "junk" rating from Standard & Poor's.