Ratings service Standard & Poor’s has downgraded its long-term and short-term sovereign credit ratings on Greece from B-/B to CCC+/C. The ratings have been removed from CreditWatch, but the outlook is Negative.

The revised rating moves Greek sovereign bonds deeper into junk territory from a highly speculative investment to one with substantial risk. That could be an understatement.

According to the ratings firm, the announcement deviates from its announced calendar and thus requires a detailed explanation for the deviation under European Union regulations. Here is what S&P said:

[T]he deviation was prompted by substantial deterioration in the liquidity of the Greek government and the Greek banking system — beyond our previous assumptions — and the resolution of our placement of the ratings on CreditWatch negative.

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S&P said that business, financial and economic conditions in Greece “have worsened due to the uncertainty stemming from the prolonged negotiations between the almost three-month-old Greek government and its official creditors.” S&P goes on:

The outlook for full-year economic growth is highly uncertain. We estimate the Greek economy has contracted by close to 1% over the past six months despite a weaker euro and lower oil prices. In our opinion, economic prospects could deteriorate further unless talks between Greece and its creditors conclude soon.

Regarding the country’s banks, S&P noted that Greek banks have lost about 14% of their deposits to customer withdrawals since the end of November 2014.

Some €2.4 billion in Greek treasury bills mature this week, and S&P estimates that foreign holders of about a third of that total will not rollover the debt.

S&P also goes into some detail about Greece’s relationship with its official lenders: the European Commission, the International Monetary Fund (IMF) and the European Central Bank. The ratings agency’s view is that unless a deal is reached by mid-May, the Greek government may not have the cash to make a €750 million payment due the IMF on May 12.

In Greece’s favor are long debt maturities and very low interest rates, which S&P reckons run at about 2% currently.

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The big fear, of course, is that Greece will wave goodbye to the eurozone and tear up its bills as it leaves. According to S&P, Greece has consistently excluded private-sector creditors from its implied threats to leave its official creditors holding some very bad paper. That said, S&P notes that “the incentives for another restructuring could shift if Greece’s sovereign debt difficulties intensify.”

The National Bank of Greece S.A. (NYSE: NBG) traded down more than 3% in the noon hour Wednesday, at $1.17 in a 52-week range of $0.98 to $4.58.

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