Standard & Poor΄s Ratings Services said on Tuesday it lowered its long-term sovereign credit rating on Greece to ΄BB-΄ from ΄BB+΄ and maintained the rating on CreditWatch with negative implications.
At the same time, the rating agency placed its ΄B΄ short-term sovereign credit rating on Greece on CreditWatch with negative implications.
The agency said the cut followed the concluding statement of last week΄s European Union summit, which confirmed expectations that sovereign-debt restructuring may be a potential prerequisite for borrowing from the European Stability Mechanism.
S&P also cut Portugal΄s credit rating to BBB- from BBB on Tuesday, leaving it just one notch above junk status.
The S&P downgrade had an immediate impact at Athens Stock Exchange and dragged the General Index down at -1,97%.
As if the downgrade was not enough, JP Morgan Chaseforecasted a further widening of Greek bond spread and those of Portugal and Ireland as well. (source: Capital.gr )
Greek PM lashed out against Rating Agencies
I don’t know how the political leaderships of Portugal and Ireland reacted but Greek Prime Pinister George Papandreou lashed out against the rating agencies.
The rating agencies until recently evaluated by AAA companies and banks, which proved to be toxic and responsible for the crisis, said Papandreou and added “From the bubble of prosperity they crossed over to panic. We proved that we are on right track and this is recognized throughout Europe”.
Greek prime minister stressed that “We are not downgraded because of what Greece is doing” and undrelined that “The whole effort and the whole program of Greece is to have the country return to the markets soon.” (source: in.gr )
