Moody's slashes Greek debt on 'substantial' private sector losses

Moody's has cut Greece's credit rating by three notches following the agreement of a new rescue package for the stricken country.

The agency slashed Greece's debt from Caa1 to Ca, its second lowest rating, in the view EU leaders' rescue package for the country will result in "substantial" losses for private investors. The aid plan agreed by eurozone officials on Thursday implies bonds buybacks and debt exchange, "hence a default on Greek government bonds is virtually 100%," Moody's said. The agency added it will reassess the risk profile of any outstanding and new securities issued by the Greek government after the debt exchange has been completed, Bloomberg reports. "The combination of the announced EU progr...