S&P Downgrades Greece from ‘B’ to ‘B-‘

standard & poor'sStandard and Poor’s on Friday announced its decision to lower Greece’s long-term credit rating from ‘B’ to ‘B-‘ with both long and short-term ratings remaining on CreditWatch negative.

The ratings agency said “liquidity constraints have narrowed the timeframe during which the new Greek government can reach an agreement with its creditors on a financing program,” and its belief that “the potential uncertainties surrounding the timing and success of such an agreement, risk exacerbating deposit outflows, depressing investment and weakening tax compliance.”

S&P also said that the debt-laden eurozone country’s long and short-term ratings remained on “negative” credit watch, meaning they could be lowered again. The agency warned that drawn out talks with creditors could lead to a “worst-case scenario,” with a need to impose capital controls and a loss of access to “lender-of-last-resort financing.” This had the potential to result in “Greece’s exclusion from the Economic and Monetary Union.”
(source: ana-mpa)