(9 August 2012 – Europe) Standard & Poor’s (S&P) cut Greece’s debt rating outlook to negative on Tuesday, while warning the worsening economy and political challenges could soon force another downgrade.Greece’s sovereign credit rating is already at junk-level CCC, S&P said Athens’s lenders are likely to have to adjust their bailout financing terms or put up more money to avoid another downgrade for the country.
‘The negative outlook reflects the potential for a downgrade if shortfalls in Greece’s 2012 deficit and arrears targets established under the current EU/International Monetary Fund program are not met by new funding or other relief’ from key creditors, S&P said.
S&P said Greece is likely to require additional financing this year from the European Union and IMF to be able to stay afloat, given the delays in closing its budget gap and its contracting economy.
‘We are revising the outlook on the long-term ratings on Greece to negative, reflecting the possibility of a downgrade if Greece fails to secure the next disbursement of the EU/IMF Program,’ it said.