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Fitch downgrades Greece to restricted default

Protesters raise a Greek flag in front of parliament during a rally against austerity economic measures in Athens' Syntagma (Constitution) Square in this June 17, 2011 file photo.


The Fitch ratings agency has downgraded Greece to "restricted default" after the country secured a strong majority of private creditors to participate in a bond swap deal that will wipe off about €105-billion from its national debt.

Friday's move was expected, with ratings agencies having said they considered the bond swap deal to be a default. The two other major ratings agencies, Moody's and Standard & Poor's, have already downgraded Greece to default level.

Following weeks of intense discussions, the Greek government said Friday that 83.5 per cent of private investors holding its government bonds were participating in a bond swap. Of the investors holding the €177-billion ($234-billion U.S.) in bonds governed by Greek law, 85.8 per cent joined.

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