Moody's upgrades Greece's bonds 2 notches on better outlook

New York: Credit ratings agency Moody`s raised Greece`s government bond ratings by two notches Friday, citing improved public finances and a better economic outlook.

Moody`s action lifts Greece`s ratings from "C," the lowest possible level, to "Caa3," which is still in sub-prime status. The outlook for the rating is "stable."

The higher rating was warranted, according to Moody`s, after Greece took steps to improve its fiscal condition, reducing its headline deficit 74 percent since 2009 and targeting a primary surplus of close to 1.5 percent of GDP in 2014.

Moody`s also said there was evidence the Greek economy was "bottoming out after nearly six years of recession" and that the medium-term prospects have also improved.

Finally, Moody`s cited a much-reduced interest burden following a restructuring of the country`s debt.

On Friday, Greek Finance Minister Yannis Stournaras told reporters that Greece hoped to reach an agreement on a deal to unlock a USD 1.4 billion in financial bailout aid by the end of this year.

The negotiations are with the so-called creditor troika -- the European Union, International Monetary Fund and European Central Bank.

Athens disagrees with creditors on the level of a forecasted financing gap for 2014 and on the measures needed to cover it.