Moody's

The ratings agency Moody's has downgraded Greece to the lowest rating on its bond scale, following a deal with private investors that would see them ultimately lose 70 percent of their holdings in Greek debt.

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Moody's late Friday lowered Greece's sovereign rating to "C" from "Ca," arguing that the risk of default remains high even a bond-swap deal with banks and other private investors, due to be completed this month, is successful.

Ratings agency Standard & Poor's took similar action on Feb. 27.

Greece's deep and prolonged recession took its toll on the central government's finances, which swung from surplus to deficit, official figures showed Friday.

Provisional figures from the finance ministry figures showed Greece posting a deficit in January of 490 million euros ($652 million), in contrast to last year's equivalent surplus of 154 million euros.

The ministry's General Accounting Office said revenues during the month were hit by the expiry of a one-off business tax, as well as reduced revenues from consumption.

Revenues in January totaled 4.87 billion euros ($6.48 billion). Though a little bit better than the government's latest target, it's markedly worse than last year's equivalent of 5.12 billion euros.

Greece has just embarked on its fifth year of recession, which has sent unemployment up to a record high just below 20 percent. In that context, households have reined in spending and that's knocked the government's sales tax receipts.

A more detailed look at the figures showed that the government was still running a primary deficit — a net loss before including interest payments — of 33 million euros ($43.6 million) in January. These figures exclude other portions of the general government accounts, which are used when the country's international creditors assess Greece's public finances.

Gripped by a severe financial crisis, Greece has been relying since May 2010 on rescue loans from its partners in the euro zone and the International Monetary Fund [cnbc explains] . But despite receiving 73 billion euros from its initial 110-euro billion bailout and pushing through tough austerity measures in return, the country has consistently missed its reform targets.

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With the first rescue package clearly unable to prevent Greece from a messy default that could have threatened Europe's single currency, European leaders agreed to extend the country a second bailout, this time worth 130 billion euros ($172 billion). It will be accompanied by a debt reduction deal with private holders of Greek government bonds.

On Thursday, the euro zone's finance ministers agreed in principle to release the first batch of bailout loans to Greece to finance the bond swap deal with private investors. But the final green light for the swap will come next week.

The deal, which aims to cut 107 billion euros ($144 billion) from the country's debt [cnbc explains] , is a precondition for Greece to receive the rest of bailout funds.

In return for the second bailout, the government has pushed through legislation setting out more spending cuts, including salary and pension cuts, and has begun pushing through a promised privatization plan for state property.

On Friday it called for bids for the exploitation of one of its former Olympic Games venues, the International Broadcasting Center. Built to accommodate broadcasting facilities for the 2004 Games, the IBC has since been converted into a shopping mall. It includes a vacant area of 14,300 square meters (153,925 square feet) and an underground parking area of 7,300 square meters (78,577 square feet).

The country's Asset Development Fund issued a tender for the rights of exclusive use, management and exploitation of the facility for 90 years. The offer includes the area currently leased as a shopping mall under a 40-year agreement that expires in 2047, the fund said.

Earlier this week, Greece launched a privatization offer for its Public Gas Corporation, DEPA.

Greece hopes to raise 11 billion euros by the end of 2012 from a privatization drive started last year, and 20 billion euros ($26.9 billion) by the end of 2013. The original target had been to raise 50 billion euros by 2015.
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