Standard & Poor's downgraded Greek credit rating to become the world's lowest on the increasing likelihood that the nation will face debt restructuring and be forced to be the first sovereign default in the euro area.

S&P slashed the rating by three notches on Monday to CCC from B and said in a note yesterday that the move reflects our view that there is a significantly higher likelihood of one or more defaults,

The intensified debate among EU finance chiefs is increasing the pressure on debt-laden nations amid scheduled bond sales this week. The S&P in the statement also supported the ECB's calls and stands at odds with Germany's preposition to share a higher burden with investors in the second bailout. Where the possibility of bond swaps or extending the maturity for Greek debt according to S&P would likely be on terms less favorable than the debt being refinanced, which we, in turn, would view as a de facto default according to Standard & Poor's published criteria.

The Standard & Poor's comments come in line with previous comments from Moody's that also considered such a move on debt in the new bailout being discussed for Greece as default, where the new terms are worse than those for outstanding debt in the market.