Moody's Investors Service has downgraded Greece's bond ratings to "junk" because of concerns the country could fail to cut its deficit and pay down its debt.

Moody's cut the rating by four notches to Ba1 from A3 and also downgraded Greece's short-term issuer rating to "not-prime" from "prime."

Moody's said the drop is justified despite a $135 billion loan package extended to Greece by the International Monetary Fund and European Union countries that use the euro currency.  The service said while the support package does create a credible set of reforms, the lower rating is consistent with the risks associated with it.

The credit downgrade is the second to hit Greece in recent weeks.  Standard and Poor's cut Greek long-term government bonds three levels in late April to "junk" status.  It linked the downgrade to what it called the political, economic and budgetary challenges facing the Athens government.  Those cuts drove up borrowing costs and led to the IMF - EU bailout announced in early May.

Separately Monday,  EU and IMF auditors began reviewing Greece's efforts to enact huge spending cuts aimed at easing the financial crisis.  The cuts were demanded in return for the EU-IMF bailout.  The finance ministry says it has already exceeded its deficit-cutting targets for the first five months of this year.

Some information for this report was provided by AP, AFP and Reuters.