A leading global ratings agency has lowered its credit rating for Greek debt by three notches amid speculation that the country may be forced to pursue some form of restructuring, according to Reuters. On Friday, Fitch Ratings announced that it has cut its credit rating for Greece to B+ and issued a statement that read, “The rating downgrade reflects the scale of the challenge facing Greece in implementing a radical fiscal and structural reform program necessary to secure the solvency of the state.” The agency added that any “extension of the maturity of existing bonds” or any loss imposed on bondholders would be considered a default.
The decision moves the Greek rating into “highly speculative” territory, but Fitch warned, “In the absence of a fully funded and credible European Union/International Monetary Fund program, the rating would likely fall into the ‘CCC’ category indicating that a Greek sovereign default was highly likely.” The country’s finance ministry responded that the downgrade “Overlooks the additional commitments already undertaken by the Greek government to meet its 2011 fiscal targets and speed up its privatization program.” Fitch also kept the outlook for Greece “negative.”