Paying The Price: Greek domestic debt rating slashed

NEW YORK: Rating agency Moody’s Investors Service has said that it has lowered its ratings ceiling on Greek domestic debt issuers due to the rising risk of the country exiting the euro zone, but added it did not consider that the most likely scenario for the country. Moody’s said that it lowered its assessment of the highest rating that can be assigned to a domestic debt issuer in Greece to Caa2, rated as poor quality and very high credit risk, below the highest existing rating by the firm on any Greek security, which is B1, judged as being speculative and highly risky, for certain covered bonds.  Abandoning the euro will mean large losses for investors as government and private debt issued under Greek law will have to be redenominated and the country’s economy and banking system will be hit hard, the statement said.

Published in The Express Tribune, June 3^rd, 2012.