Standard & Poor's once again received a lot of criticism last week for being too slow to act with its rating downgrades and especially in the case of Greece. Why was S&P only now reducing Greece to junk status when the market, through bond prices and CDS spreads, had made the move weeks ago?This is the claim that is always made in these situations but it is just as inevitable that the market will sell off even further after the rating action is announced. Greek CDS spreads moved out almost 100 basis points, to approach 800 bps, immediately after S&P's announcement. Similarly, CDS spreads for Portugal widened by 80 bps to 395 bps on S&P's announcement of its downgrade. And even a week earlier, when Moody's downgraded Greece to 'A3' (still very much an investment grade rating) and left the rating on review for further possible downgrade, Greek CDS spreads widened 165 bps on the day to hit a then new record of 650 bps.The fact that this occured signals that the market does indeed see value in the actions taken by the rating agencies, even though a quantum of the information in the rating action has already been priced in. In this sense the market is right, S&P and Moody's could have moved sooner.As it was, Moody's felt compelled to issue another bulletin on Greece on Thursday, to reiterate its comments of a week earlier. Moody's claimed that it had previously indicated that a multi-notch downgrade is likely (it wasn't in the press release a week earlier) and went on to advise that it now expects to finalise its review of Greece's 'A3' sovereign bond rating shortly after the details of the euro area/IMF program are unveiled.It said it has consistently maintained that Greece's short-term liquidity and restructuring risks are negligible given the depth of international commitment to maintaining regional financial stability. It believes that the appropriate repositioning of Greece's rating should therefore be based on the country's medium-term credit fundamentals. It seems the market shared Moody's optimistic outlook for Greece, at least briefly. On expectations of a detailed rescue package announced over the weekend, equity and credit markets rallied on Thursday. Greek CDS spreads narrowed by 174 bps, to close at 635 bps but closed on Friday, in Europe, back out at almost 700 bps.