EUROPEAN efforts to keep Greece afloat have prompted credit rating agency Standard & Poor’s to lift its rating on the country, it revealed last night.
Greece’s sovereign rating had previous been “selective default” but is now raised to the less severe “B minus”, with a stable outlook.
“The rating action reflects the completion on 17 December of Greece’s distressed debt buyback in tandem with approval by the Eurogroup of a loan disbursement to Greece under the second economic adjustment programme,” S&P said.
The statement added: “The upgrade reflects our view of the strong determination of Eurozone member states to preserve Greek membership [of the euro].”
Standard & Poor’s had cut the rating to selective default earlier this month after the Greek government invited private sector bondholders to participate in a debt buyback meant to help lower the country’s debt burden.
The rating agency said at the time that the consummation of the debt buyback would likely see the selective default cured.
EU paymaster Germany and the International Monetary Fund both endorsed the result of the bond buyback, which helped convince Greece’s lenders to unlock €49.1bn (£40bn) in aid by the end of March 2013.
City A.M. Reporter