Thursday, June 2, 2011

Greece default risk at 50:50 says Moody's -- Greek bonds now just "5 notches above default"

Greece's credit rating has been cut again by rating agency Moody's.

Moody's cut its rating by three notches from B1 to Caa1 - just five notches short of default.

The new rating means Greece is 50% likely to default on or restructure its debts in the next five years, according to Moody's methodology.

Meanwhile, Athens is completing the negotiations for drawing down the fifth tranche of its 110bn euro bail-out from the EU and International Monetary Fund.

Last week, the chairman of the group of eurozone finance ministers, Jean-Claude Juncker, said that the IMF may not approve the latest cash advance unless Greece could convince them it will remain solvent over the next 12 months. (read more)