Moody's ratings agency downgraded Greece's sovereign debt ratings by three notches to Ca from Caa1, with a developing outlook, warning that a planned debt swap would constitute a default, the agency said on Monday
"The announced EU program along with the Institute of International Finance's statement representing major financial institutions implies that the probability of a distressed exchange, and hence a default, on Greek government bonds is virtually 100 percent," Moody's said, adding that private creditors will likely suffer "substantial" losses on their holdings of government debt.
The agency was more optimistic about Greece's longer-term prospects.
"Looking further ahead, the EU program and proposed debt exchanges will increase the likelihood that Greece will be able to stabilize and eventually reduce its overall debt burden."
