Ratings agency Moody's downgraded Greece to C, the lowest notch, from Ca on March 2. The new rating on Greece's local and foreign currency bonds comes in spite of the recent deal and bailout. Moody's expects investors to lose 70 percent plus, as a result of the debt swap deal made to avoid outright default, and, according to the ratings agency, the 70 percent figure justifies the lowest possible rating.

The ratings agency considers the recent deal to write off Greek debt an effective default – a default in nature but not in name. Moody's pours cold water on any hopes of improvement in sovereign rating for Greece in the near future. “For Greece's bond rating to rise above levels associated with very high probability of future default, the pace of fiscal consolidation and/or structural reform implementation would need to proceed much faster than is currently expected,” reads the Moody's statement. Moody's predicts that Greece's debt stock will be well above 100 percent of GDP for many years and, even with the EU bailout and deal with investors, believes the likelihood for a Greek default remains high for the foreseeable future.

Along with other US ratings agencies, Moody's provides credit ratings for sovereign debt and companies, as well as research, tools and analysis for global financial markets. Moody's has a presence in 28 countries and recorded revenue of USD 2.3 billion in 2011.

Liam Lever, liam@romania-insider.com