Credit rating agency Moody's has cut Greece's rating, warning that a planned debt swap would constitute a default.
The rating was cut another three notches from Caa1 to Ca - just two more notches shy of a default rating.
"The announced EU programme... implies that the probability of a distressed exchange, and hence a default, on Greek government bonds is virtually 100%," the agency said.
The debt swap would increase Greece's borrowing terms by up to 30 years.
However, a statement last week from the Institute of International Finance - a trade body representing global banks and other major lenders - conceded that the debt deal would cost private sector creditors an estimated 21% of the value of the Greek debts they currently hold. More...