Credit ratings agency Standard & Poor’s late on Monday declared Greece in “selective default” following its private sector involvement deal which will see bondholders take a 70 percent haircut on the net value of their bonds.

As part of the agreement an estimated €100bn will be wiped off Greece’s debt. The average maturity of creditors bonds will also be extended, allowing for reduced short term funding requirements.

The news comes in spite of Germany’s parliament earlier in the day approving a second bailout plan for the debt stricken country.