The agency said it now considered that a Greek debt default was "highly likely in the nearterm".

It said the downgrade followed Tuesday's hard-won agreement for a second rescue of Greece, which includes a 53.5% writedown on private holdings of the country's sovereign debt through a bond swap scheme.

The writedown, worth à107-billion, is intended to help reduce the country's à350-billion debt to more manageable levels.

The agency warned the rescue's debt exchange with private creditors "will, if completed, constitute a rating default" and result in the country's rating to be lowered.

It said that, shortly after the completion of the exchange, Greece's rating would be moved out of the restricted default category and "re-rated at a level consistent with the agency's assessment of its post-default structure and credit profile" .