S&P cuts outlook on Greece to ‘negative’

WASHINGTON - Agence France-Presse

Standard & Poor’s cut Greece’s debt rating outlook to negative on Aug. 7, saying the worsening economy and political challenges could soon force another downgrade.

With Greece’s sovereign credit rating already at junk-level CCC, S&P said Athens’s lenders are likely to have to adjust their bailout financing terms or put up more money to avoid another downgrade for the country.

“The negative outlook reflects the potential for a downgrade if shortfalls in Greece’s 2012 deficit and arrears targets established under the current EU/International Monetary Fund program are not met by new funding or other relief” from key creditors, S&P said.

Agency sees more support to Greece

S&P said Greece is likely to require additional financing this year from the European Union and IMF to be able to stay afloat, given the delays in closing its budget gap and its contracting economy.
It said Athens will probably be unable to meet the conditions of the current EU/IMF bailout program that would allow it to secure the next tranche of rescue financing, crucial to remaining stable.
“We are revising the outlook on the long-term ratings on Greece to negative, reflecting the possibility of a downgrade if Greece fails to secure the next disbursement of the EU/IMF Program,” it said.