Moody's keeps junk rating for Greece debt

(LONDON) - Moody's has maintained its deep junk "Caa3" credit rating for Greek government debt, but has upgraded its outlook following recent political breakthroughs.

"Moody's Investors Service has today confirmed Greece's government bond rating at Caa3 and changed the outlook to stable," the agency said in a statement issued Friday.

"The key drivers behind the confirmation are the approval of the third bailout programme, and the emergence of a political configuration that is slightly more supportive than its predecessors for the implementation of reforms which the programme will require," it added.

Moody's cut its credit rating for Greece to deep-junk -- jut two steps above "default" -- in July, shortly before a referendum on the terms of the third bailout.

"Notwithstanding the positive developments the Caa3 rating continues to incorporate a high level of implementation risk given Greece's weak institutions and past poor track-record of implementing conditions of financial support," added the statement.

Newly re-elected left-wing Prime Minister Alexis Tsipras said on Friday that Greece must "quickly implement" the terms of the tough EU bailout agreed in July.

Tsipras won Sunday's general election, picking up between 33 and 35 percent of the vote.

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Moody's