European politicians and bankers had expressed confidence last week that the French proposal would not trigger a default, but ratings agency Standard & Poor's said it would involve losses to debt holders, most likely earning Greece a "selective default" rating.
"It is our view that each of the two financing options described in the (French banks') proposal would likely amount to a default under our criteria," S&P said.
French banks, major holders of Greek sovereign debt, proposed voluntarily renewing some of the bonds when they fall due, but on different terms.
S&P cut Greece's sovereign rating to "CCC" last month, from "B," on a view that any restructuring of the country's massive debt load would count as an effective default.
The euro fell from around $1.4550 to a session low around $1.4510 after the latest S&P comment.