Fitch downgraded Greece on Tuesday to 'C' from 'CCC', a move widely expected after the country said it may enforce losses on bondholders who do not voluntarily sign up to a debt swap plan accompanying its EU/IMF-approved bailout.
"The exchange, if completed, would constitute a 'distressed debt exchange'," Fitch said.
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When the bond swap plan is completed Greece's rating will drop further to 'restricted default' and then will be re-rated again "at a level consistent with the agency's assessment of its post-default structure and credit profile," Fitch said.
(Reporting by Harry Papachristou)