Standard & Poor's on Monday cut Greece long-term ratings to 'selective default', the second ratings agency to proceed with a widely expected downgrade after the country announced a bond swap plan to lighten its debt burden.

S&P said that once the debt exchange is concluded, it will likely raise Greece's sovereign credit rating to the 'CCC' category.

We lowered our sovereign credit ratings on Greece to 'SD' following the Greek government's retroactive insertion of collective action clauses (CACs), the U.S. ratings agency said.

It said Greece's retroactive insertion of CACs -- which enforce losses on investors who do not voluntarily sign up to the offer -- changed the original terms of the affected debt and made the exchange a distressed debt restructuring.

Greece formally launched the bond swap on Friday. Under the deal, bondholders are to take losses of 53.5 percent on the nominal value of their Greek bonds, with actual losses put at around 74 percent in real terms.

S&P's move follows that of Fitch, which last week cut Greece's long-term ratings to its lowest rating above a default as a result of the bond exchange plan.