Moody's downgrades Greece's government bond rating from Caa2 to Caa3, says on review for further downgrade

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  • Believes that without ongoing support from official creditors, Greece will default on its privately-held debt
  • Lowers Greece's local- and foreign-currency bond ceilings to Caa2 from B3
  • Greece's local- and foreign-currency bank deposit ceilings remain at Caa3
  • While Greece's debt is currently affordable due to soft financing terms, it is unsustainable over the long term

  • In order to bring debt load down to more manageable levels, Greek government would need to run large primary surpluses for a number of years

  • Announcement of a referendum adds a further, more acute, risk which poses additional risks to private creditors