Back
9 Feb 2015
S&P downgrades Greece’s rating from to B- from B
FXStreet (Mumbai) - Standard & Poor's (S&P) cut Greece's long-term sovereign credit rating to B- from B on Friday night, warning that liquidity constraints on Greek banks would limit the time the new government has to achieve a deal with its international lenders.
The agency said both Greece's long and short-term ratings remained on credit watch negative, and warned that pro-longed talks could further worsen economic situation in the country.
The agency noted, "Although the newly elected Greek government has been in power for less than two weeks, we believe its limited cash buffers and approaching debt redemptions to official preferred creditors constrain its negotiating flexibility,"
"Liquidity constraints have narrowed the timeframe during which Greece's new government can reach an agreement with its official creditors."
"A prolongation of talks with official creditors could also lead to ... deposit withdrawals and, in a worst-case scenario, the imposition of capital controls and a loss of access to lender-of-last-resort financing, potentially resulting in Greece's exclusion from the Economic and Monetary Union."
The agency said both Greece's long and short-term ratings remained on credit watch negative, and warned that pro-longed talks could further worsen economic situation in the country.
The agency noted, "Although the newly elected Greek government has been in power for less than two weeks, we believe its limited cash buffers and approaching debt redemptions to official preferred creditors constrain its negotiating flexibility,"
"Liquidity constraints have narrowed the timeframe during which Greece's new government can reach an agreement with its official creditors."
"A prolongation of talks with official creditors could also lead to ... deposit withdrawals and, in a worst-case scenario, the imposition of capital controls and a loss of access to lender-of-last-resort financing, potentially resulting in Greece's exclusion from the Economic and Monetary Union."