Today's Coming Crisis Movie

Monday, July 25, 2011

Moody's downgrades Greek debt again, warns of default: European madness continues

International credit rating agency Moody's announced Monday it has once again downgraded Greek's sovereign debt rating - just four days after European leaders agreed on a second bailout for the debt-strapped nation.

A default on Greek debt instruments was near to certain, Moody's said in an announcement published to its website Monday. But EU bailouts to Greece will likely help the country to stabilize down the road and prevent a default domino effect in the Eurozone, Moody's added.

"Moody's Investors Service has today downgraded Greece's local- and foreign-currency bond ratings to Ca from Caa1," Moody's said, calling the probability of a default on Greek government bonds "virtually 100%."

The agency based the default assessment on the "announced EU program" and a statement on debt reassignment by the Institute of International Finance (IFF), which represents financial institutions.

The IFF has indicated that private creditors holding Greek debt instruments would likely take losses over 20%, Moody's said. (more)