S&P downgraded Greece to "B-" from "B," with a negative outlook.
The downgrade reflects our view that the liquidity constraints weighing on Greece's banks and its economy have narrowed the timeframe during which the new government can reach an agreement on a financing programme with its official creditors," S&P said in part in its statement.
"Although the newly elected Greek government has been in power for less than two weeks, we believe its limited cash buffers and approaching debt redemptions to official preferred creditors constrain its negotiating flexibility," S&P said.
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The agency also warned that the European Central Bank's decision to stop accepting Greek debt as collateral risked exacerbating a steady run on Greek banks.
In a worst-case scenario, the agency said, that bank run could lead to capital controls and the loss of access to emergency financing, which could lead to the long-feared "Grexit," or Greek exit from the euro.