Moody's Investors Service said on Saturday it considers Greece to have defaulted per Moody's default definitions.
Greece’s private investors agreed on Friday to swap their government bonds for new securities that are worth 83.5 percent of the country’s sovereign debt. The vast majority of remaining bondholders are likely to be drawn in following the exercise of collective action clauses that will be inserted pursuant to a recent act by the Greek parliament.
“The terms of the exchange entail a discount – a loss to creditors – of at least 70% on the net present value of existing debt,” the U.S.-based ratings company said. “According to Moody's definitions, this exchange represents a "distressed exchange," and therefore a debt default.”
Moody’s downgraded Greece’s sovereign debt rating from Ca to its lowest level, C, on March 3.
On Friday Fitch Ratings downgraded Greece’s long-term foreign and local currency issuer default rating (IDR) to “RD” (restricted default) from “C.”
