US rating agency Standard & Poor's has lifted Greek out of default territory. In a move widely expected by economic pundits, it has raised Greece's credit rating after large-scale debt restructuring in that country.
Standard & Poor's raised Greece's credit rating to low-speculative grade on Wednesday. It thus upgraded the country's creditworthiness from selective default to CCC, with a stable long-term outlook.
The move came on the back of the biggest sovereign debt restructuring in Greece's history which boiled down to a massive write-down.
Bondholders agreed to a cut of about 75 percent on the real value of their investment as the country was aiming to bring down public debt from 165 percent of gross domestic product (GDP) last year to 120 percent by 2020.
"While the debt swap has, in our view, alleviated near-term funding pressures, Greece's sovereign debt burden remains high," S&P warned on Wednesday. The US rating agency argued that the current recession and the May 6 general election in Greece were posing risks to required fiscal adjustments.
"The ratings could be lowered [again], if we believe that there is a likelihood of a distressed exchange of Greece's remaining stock of commercial debt," Standard and Poor's said in a statement.
Fitch for its part assigned Greece a speculative B-rating in mid-March, thus becoming the first major rating agency to lift the country out of default territory after a deal wiped some 100 billion euros ($132 billion) off its deficit though a debt swap.
hg/nk (Reuters, AFP, dapd)