U.S. ratings agency Moody's Investors Service upgraded Greece's long-term issuer rating to 'Caa2' from 'Caa3' following the extension of a credit lifeline to the country by euro zone governments.
Moody's also changed the outlook to positive from stable and said that it sees tentative signs of the economy stabilizing.
The euro zone government had given Greece another 11th-hour credit lifeline worth 8.5 billion euros ($9.51 billion), last week.
The International Monetary Fund Managing Director Christine Lagarde said that the IMF would also join the bailout, offering Athens a standby arrangement of less than $2 billion.
Greek Prime Minister Alexis Tsipras said earlier this week that he expects government bonds yields to continue to fall, helping the country's plans to return to bond markets.
The rating agency also added that it expects to see growth in the Greek economy this year and next and expects the public debt ratio to stabilize this year at 179 percent of GDP.
Moody's also raised the long-term country ceilings for foreign-currency and local-currency bonds to B3 from Caa2. ($1 = 0.8937 euros) (Reporting by Parikshit Mishra in Bengaluru; Editing by Kevin Liffey and Diane Craft)
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