PARIS: Fitch Ratings on Friday cut Greece to a "restricted default" rating after Athens said a bond swap with private creditors had attracted enough support to go forward.
"Fitch Ratings has downgraded Greece's Long-term foreign and local currency Issuer Default Ratings (IDRs) to 'RD' ('Restricted Default') from 'C' following today's confirmation from the Greek government and eurozone officials that the exchange of Greek government bonds will proceed," it said in a statement.
The bond swap is expected to wipe some 100 billion euros ($132 billion) off Greece's debt, with investors accepting a 53 percent cut on the face value of their holdings.
"The downgrade to 'RD' reflects Fitch's previous commentary that the exchange would constitute a sovereign default event under the agency's distressed debt exchange (DDE) rating criteria," added Fitch.
The bond swap is a key condition for the eurozone to move forward with a new bailout worth 130 billion euros and bring Greece back onto a trajectory of reducing its debt to a sustainable level of roughly 120 percent of annual output by 2020.
The agency said it would issue a new forward-looking rating after the bond swap is completed.
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