LONDON (Reuters) - Moody's cut Greece's credit rating by three notches and kept it on review for further downgrades on Monday, citing significant risks to its fiscal restructuring program and the chance of a voluntary debt restructuring.
Moody's now has the lowest rating for Greece of all the major credit agencies and is the first to classify Greek government debt as 'highly speculative'.
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"The fiscal consolidation measures and structural reforms that are needed to stabilize the country's debt metrics remain very ambitious and are subject to significant implementation risks," Moody's said in a statement.
It added that it saw risks that conditions attached to continuing financial aid after 2013 will reflect solvency criteria that the country may not satisfy, and result in a restructuring of existing debt.
The spread on 10-year Greek debt against benchmark Bunds widened by 8 basis points to 9.13 percent following the Moody's downgrade, while the euro fell about 30 pips against the dollar.
(Reporting by Angeliki Koutantou; Writing by Toby Chopra; editing by John Stonestreet)