Moody’s, the credit agency known for rating nation’s credit ratings cut the troubled Greece’s rating even further today. The United States, while with its own economic issues is a Aaa rating, the highest rating one can receive. Greece however has already been cut and was cut even further today.
Greece went from Caa1 down another few notches to Ca, which is just 2 ratings above a default rating. Moody’s went onto say that the recent programs implemented by the European Union in an effort to assist Greece implies the status of distressed exchanges, therefore leading to a default, to justify their further downgrades.
Fitch, a similar credit rating company as Moody’s warned that the recent European deal that would extend the borrowing terms to 30 years would essentially be the same as selective defaulting, leading to Moody’s similar evaluation.
The debt exchange deal with the private sector was meant to help stabilize the Euro and prevent the debt crisis from spreading out of Greece and into other economically struggling nations such as Italy and Spain.
While acknowledging that the deal would assist in stabilizing Greece, Moody’s made it clear that the deal would only have short term ramifications and was not a solution to the Greece Debt Crisis. With measures on its way to assist Greece, it is still unclear and Moody’s nor Fitch have given indication on how and when Greece may receive an upgraded rating.
This downgrade by Moody’s has now put Moody’s along with S&P as giving Greece the lowest credit rating in the world, passing up Cuba and Ecuador.