Moody's warns Greek default 'almost certain'

The rating agency warned that last week's bailout package agreed by euro zone leaders will make it easier for Greece to reduce its debt, but the country still faced medium-term solvency challenges and significant implementation risks.

"The announced EU programme along with the Institute of International Finance's statement implies that the probability of a distressed exchange, and hence a default, on Greek government bonds is virtually 100 percent," the agency said in a statement.

"(Greece's) stock of debt will still be well in excess of 100 percent of GDP for many years and it will still face very significant implementation risks to fiscal and economic reform," it added.

The ratings agency is wary that the euro zone bailout package sets a negative precedent for investors on future restructuring.

"The support package sets a precedent for future restructurings should the finances of another euro area sovereign become as problematic as those of Greece," Moody's said.

According to the ratings agency obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.

The outlook is developing.

Standard & Poor's and Fitch have already downgraded Greece to CCC, one notch above Moody's.