Rating agency Moody's Investors Service on Friday downgraded the highest possible credit rating in Greece to Caa2, citing the increasing risk of an exit by the country from the euro area.
The highest rating on any Greek security is currently B1, Moody's said. It warned that if Greece exits the Euronze after this month's parliamentary elections - the likelihood of which is high - the maximum rating it would assign to Greek securities would decrease further.
The agency observed that an exit would result in large losses to investors due to re-denomination of government debt and private debt securities issued under Greek law and lead to severe disruption to the country's banking system and acute dislocations in the real economy.
However, if the "Greek" issuer is essentially a non-domestic company, has substantial assets outside the country or receives substantial support from an entity outside the country, there is a potential for exceptions whereby a security could be rated higher than Caa2, Moody's said.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.