Greek Debt Rating Cut Three Steps to B1 by Moody's on Rising Default Risk

Bloomberg
March 7, 2011

The cost of insuring Greek debt against default rose to a record after Moody’s Investors Service cut the country’s credit rating by three notches.

The Finance Ministry in Athens called the move, which sent its rating to B1 from Ba1, “completely unjustified.” Moody’s said lagging tax collection and “implementation risks” would make it more difficult to reach budget-cutting targets in a 110 billion-euro ($154 billion) bailout.

“The risk has materially increased of a default event,” said Sarah Carlson, Moody’s senior analyst for Greece, said in a telephone interview today from London. “Our central view is that the Greek government will achieve its objectives and it won’t need to impose losses on credits, but there are material risks to that outcome.”

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