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S&P hikes Greece’s credit rating, cites euro zone’s ‘strong determination’

Employees at the state-run Hellenic PostBank protest in front of the Greek parliament in Athens on Monday, Dec. 17 2012,

Kostas Tsironis/AP

Rating agency Standard & Poor's on Tuesday raised Greece's sovereign credit rating to B-minus with a stable outlook from selective default, citing Europe's efforts to keep the country part of the euro.

"The upgrade reflects our view of the strong determination of European Economic and Monetary Union (euro zone) member states to preserve Greek membership in the euro zone," S&P said.

"The outlook on the long-term rating is stable, balancing our view of the government's commitment to a fiscal and structural adjustment against the economic and political challenges of doing so," the agency added.

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Standard and Poor's had cut the rating to selective default earlier this month after the Greek government invited private sector bondholders to participate in a debt buyback meant to help lower the country's debt burden.

The rating agency said at the time that the consummation of the debt buyback would likely see the selective default cured.

Greece's major lenders – EU paymaster Germany and the International Monetary Fund – both endorsed the result of the bond buyback.

The debt buyback helped convince euro zone partners and the International Monetary Fund to unlock €49.1-billion ($64.9-billion U.S.) in aid by the end of March.

Moody's Investors Service rates the country C; Fitch rates Greece CCC. The ratings from all three agencies are speculative.

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