ATHENS (AP) ― The ratings agency Moody’s downgraded Greece to the lowest rating on its bond scale late Friday, following a deal with private investors that would see them ultimately lose an estimated 70 percent of their holdings in Greek debt.

Moody’s lowered Greece’s sovereign rating to “C” from “Ca,” arguing that the risk of default remains high even a bond-swap deal with banks and other private investors, due to be completed this month, is successful.

It said it would “re-assess the credit risk profile” after Greece issues the new bonds.

Ratings agency Standard & Poor’s took similar action on Feb. 27.

The swap deal aims to cut 107 billion euros ($144 billion) from the country’s debt, and would see private investors lose more than half the face value of their Greek bonds in exchange for new ones issued with more favorable repayment terms for the crisis-hit country.

The exchange is an integral part of a second bailout package for Greece by other eurozone countries and the International Monetary Fund.

“Looking ahead, the EU program and proposed debt exchanges will reduce Greece’s debt burden, but the risk of a default even after the debt exchange has been completed remains high,” Moody’s said.

“Moody’s believes that Greece will still face medium-term solvency challenges: its stock of debt will still be well in excess of 100 percent of gross domestic product for many years, the country is unlikely to be able to access the private market once the second assistance package runs out, and its planned fiscal and economic reforms will still face very significant implementation risks.”

Greece has been relying since May 2010 on rescue loans from eurozone partners and the IMF. But despite receiving 73 billion euros from its initial 110 billion euros bailout and pushing through tough austerity measures in return, the country has consistently missed its reform targets.

To limit a threat to Europe’s single currency, its leaders have agreed to extend the country a second bailout, this time worth 130 billion euros ($172 billion), which is accompanied by the debt reduction deal.

So far, the eurozone has agreed in principle to release the first batch of bailout loans to Greece to finance the bond-swap, with the final green light to due till come next week.

But harsh austerity has pushed the country into a fifth year of recession and seen the unemployment rate reach nearly 21 percent.

Earlier Friday, provisional figures from the finance ministry figures showed Greece posting a deficit in January of 490 million euros ($652 million), in contrast to last year’s equivalent surplus of 154 million euros.

The ministry’s General Accounting Office said revenues during the month were hit by the expiry of a one-off business tax, as well as reduced revenues from consumption.

Revenues in January totaled 4.87 billion euros ($6.48 billion). Though a little bit better than the government’s latest target, it’s markedly worse than last year’s equivalent of 5.12 billion.