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The credit rating agency Moody's decreased the credit rating of Greece by three units and put it in category Ca from category Caa1. In the reasons pointed out it stresses that private creditors will suffer major financial losses from the restructuring of the Greek debt. This category is characterized as a "selective default" and means that Greece is not capable of meeting its obligations to private creditors. Moody's experts are explicit that the announcement of the second rescue plan for the Mediterranean country, which entails buying back maturing bonds, means losses for private creditors.
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The agency refers to the statement of the Institute of International Finance, which expects the holders of Greek government bonds to lose about 20 percent of their value. The statement was made immediately after the decision made at the Summit of the eurozone last Thursday. This gives a reason to Moody's to conclude that the probability of bankruptcy of Greece is virtually 100 percent.