The rating agency reduced the long-term rating on Greek sovereign debt from B to CCC – only four notches above default. It added that in its view the country's credit outlook was "negative".
The yield on 10-year bonds issued by Greece has soared to 16.9pc and the country's sovereign debt is now the lowest rated in the world, ranking below Ecuador, Jamaica and Grenada. The move also impacted Portuguese and Irish bonds, which are also experiencing similar problems to the Hellenic nation.
The downgrade triggered an angry response from the Greek finance ministry which claimed Standard & Poor's decision was made on the back of "rumours and statements by representatives of the European Commission and European Central Bank".
The ministry said: "However, the decision ignores the intense consultations taking place between the same institutions and the International Monetary Fund aimed at designing a viable solution that will cover the financing needs of Greece in the coming years."
The statement added that the Greek government had shown "determined efforts" to "avoid at any costs" a default or restructuring of its debt repayments, as well as a "strong desire" to stay within the eurozone. It pointed to the tough fiscal strategy submitted to the Greek Parliament last week as evidence of its commitment to economic reforms. (read more)