DBRS confirms Greece

DBRS said it confirmed the Hellenic Republic’s (Greece) long-term foreign and local currency issuer ratings at CCC (high) and the short-term foreign and local currency issuer ratings at R-5.

The trend on the ratings remains negative.

This confirmation is part of DBRS’ regular biannual review and follows a downgrade on May 15 of Greece’s long-term ratings to CCC (high) from B. The downgrade was due to the acute liquidity squeeze and lack of an agreement between Greece and its creditors on a viable adjustment program. With no access to capital markets and in the absence of an agreement, financing sources appeared to be insufficient to meet financing needs.

Since the May 15 action, a support agreement has remained out of reach, the liquidity squeeze has intensified, and Greece has bunched its weekly loan repayments to the IMF until the end of June. Bank deposit outflows have continued, a buildup of arrears to domestic agents has increased, and there has been a negative knock-on effect to the real economy and the fiscal stance.

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