Fitch said Greece would be designated as having technically defaulted after the bond exchange is formalised, but the new bonds would be given a new rating. All three big ratings agencies -- Fitch, Moody's and Standard & Poor's -- downgraded Greece in July when an initial debt swap plan was unveiled, and have warned that losses for private creditors would trigger a temporary default.
As expected, Fitch said it was downgrading Greece to "C" from "CCC," and would follow up with further downgrade to a "restricted default" when the bond swap is completed. It will then reassess the country's ratings when new bonds are issued as part of the debt exchange.
"It would come out to a low, speculative grade rating", Fitch analyst, Paul Rawkins, said on the ratings after the reassessment, noting that rating would factor in the country's economic prospects and new debt profile.
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