Moody’s Investors Service on Monday downgraded Greece’s government bond ratings by four notches to junk status of Ba1 from A3, reflecting its view of the country’s medium-term credit fundamentals.

“The Ba1 rating reflects our analysis of the balance of the strengths and risks associated with the Eurozone/IMF support package. The package effectively eliminates any near-term risk of a liquidity-driven default and encourages the implementation of a credible, feasible, and incentive-compatible set of structural reforms, which have a high likelihood of stabilizing debt service requirements at manageable levels,” said Sarah Carlson, Moody’s senior analyst.

“Nevertheless, the macroeconomic and implementation risks associated with the program are substantial and more consistent with a Ba1 rating,” Carlson added. The outlook on all ratings is stable.

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