Standard & Poor's yesterday upgraded Greece's sovereign credit rating by two notches and revised its outlook to stable from negative. The embattled euro zone country has been handed an upgrade by rating agency after the country avoided default and reached a deal to begin talks with its creditors on a third bailout.

Greece's rating was lifted to CCC+ from CCC- by the agency, which argued that the risk of Athens defaulting on its private debt is "no longer inevitable" over the next six months to 12 months. "We think opportunities for Greece to default on commercial debt this year are few," S&P said in a report. The possibly Greece quit the single currency union was lest than 50 per cent, it said.

After weeks of negotiation, Athens last week agreed a €7 billion bridge loan to clear an arrear to the International Monetary Fund and make a bond repayment to the European Central Bank.

The upgrade, unsurprisingly, keeps Greece’s rating firmly in junk territory and analysts at S&P cautioned that Greece remaining in the euro zone is dependent on the Greek prime minister implementing an “ambitious” reform programme.

S&P is the first to upgrade Greece after it clinched a last-minute deal with its lenders last week which opened the way for bridge financing that will cover Athens’ funding needs through July and for bailout talks on a third aid package.

In other Greek news, US billionaire Warren Buffett dismissed a report he was considering buying a Greek island as a "total fabrication". – The Financial Times Limited 2015/Reuters