Greece Cut to Junk Bond Status

Greece’s credit rating was cut to junk status by Standard and Poor’s, the first time a euro member has lost its investment grade since the currency’s 1999 debut. Greece was lowered to BB+ from BBB+, which also warned that bondholders could lose part of their initial investment if they restructure its debt.

S&P also lowered the rating for Portugal by two steps to A- from A+.

European Union policy makers continue to struggle on an agreement for necessary measures to solve problem.

Greek bonds are still eligible as collateral at the European Central Bank, as long as the other two rating companies Moody’s Investors Service rates Greece A3 and Fitch Ratings BBB-, don’t have similar downgrades.