Moody's places Greece's Caa1 government bond rating on review for downgrade
Moody's - Feb 06, 2015
Moody's Investors Service has today placed Greece's Caa1 government bond rating on review for downgrade. The short-term rating remains unaffected at Not Prime (NP).
The key driver for the review for downgrade is the high level of uncertainty over the outcome of the negotiations between Greece and its official creditors over the terms of Greece's support programmer. The outcome could potentially have negative implications for Greece's ability to meet its funding and liquidity needs and for the probability of default on marketable securities. Moody's government bond rating applies to marketable securities only.
RATIONALE FOR REVIEW FOR DOWNGRADE
Moody's review for downgrade will assess the likely outcome of the negotiations recently initiated between the newly-elected Greek government and the euro area authorities, as represented by the European Commission (EC) and European Central Bank (ECB). In particular, it will assess the Greek government's ability to secure its medium term financing capability through an extension or amendment to its current support programmer with the EC, which would likely also allow Greek banks to maintain access to ECB financing facilities.
