Standard & Poor's on Monday downgraded Greece's long-term sovereign credit ratings from B to CCC, just four notches above default, saying the risk of debt default is increasing.

S&P also maintained the outlook on the long-term rating at negative, which means another downgrade is likely in the next 12 to 18 months.

"Risks for the implementation of Greece's EU/IMF borrowing program are rising," S&P said. "given Greece's increased financing needs and ongoing internal political disagreements surrounding the policy conditions required by Greece's partners."

S&P said European policymakers looked increasingly likely to impose a restructuring of Greece's debt -- either via a bond swap or by extending bond maturities. However, any such transactions would be viewed as a "de facto default" according to its criteria.

Monday's move makes Greece the lowest country in S&P's rankings, one notch below Moody's recently downgraded Caa1.

After the downgrade, Greek 10-year bond yields jumped to more than 17 percent for the second time this year, before closing at 16.97 percent.

In response to the rating cut, Greece said the move by Standard& Poor's overlooked the government's commitment to carry on with tough fiscal efforts to repair public finances and remain a member of the 17-member euro currency club.