Markets turns their focus back to Greece as the sovereign-debt crisis continues to present tail risk. Concerns lingers around the ability of Greece to implement long-delayed reforms and debt cutting measures agreed upon with its international lenders (the ECB-IMF) recently.
The private bond holders debt swap, known as the PSI, concludes this week on March 8 and adequate participation is required in order to release the bailout funds.
Over the weekend, Moody’s cut Greece’s sovereign debt rating to the lowest possible level as a result of the debt-restructuring deal that imposes hefty economic losses for private creditors.
Moody’s downgraded Greece’s local and foreign-currency bond ratings a notch to C from Ca. The rating agency added that it did not assign any future outlook.
In a statement the ratings agency said that “the announced debt exchange proposal implies that private creditors that participate will incur substantial economic losses on their holdings of the Greek government debt.”
Moody’s downgrade follows from recent downgrades by other ratings agencies, Fitch and Standard and Poor’s.