Greece Credit Rating Upgraded At Moody's, Outlook Revised To Stable

By Tomi Kilgore Markets MarketWatch Pulse

Greece's sovereign bond rating was upgraded one notch to Caa2 from Caa3 at Moody's Investors Service, citing the release of a EUR8.5 billion tranche under the country's adjustment program allowing the repayment of debt, improved fiscal prospects and tentative signs of a stabilizing economy. The outlook was revised to positive, which implies another upgrade is likely, from stable. The sovereign bond rating is still 8 notches below investment grade. The short-term debt rating was affirmed at not prime. "Beyond the near-term impact of allowing Greece to repay upcoming maturities, we consider the conclusion of the review to be a positive signal regarding the future path of the programme, as it required the Greek government to legislate a number of important reform measures," Moody's said in a research note. "The decision to assign a positive outlook to the Caa2 rating reflects Moody's view that the prospects for a successful conclusion of Greece's third adjustment programme have improved, which in turn raises the likelihood of further debt relief." Greece's Athex Composite Share Price Index has rallied 27.5% year to date, while the S&P 500 has gained 8.9%.

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