BEIJING - Chinese ratings provider Dagong Global Credit Rating Co said Friday that it upgraded the local and foreign currency sovereign credit rating of Greece from D to CC with a negative outlook.

"Considering Greece avoided a default on its vast debts as large private sector holders participated in a bond swap, Dagong decided to upgrade Greece's credit rating," the company said in a statement on its website.

The bond swap lowered Greece's debt burden by over 100 billion euros ($129 billion). Lower bond rates and the extension of the bond maturities will help reduce Greece's debt-financing demands in the future, according to Dagong.

However, the country will remain mired in a recession as its austerity program and structural reforms will reduce domestic demand and weak global economic recovery will restrain its export growth, Dagong said.

The Greek government's debt ratio will rise to 172.1 percent this year, and to 188.6 percent in 2013, Dagong said.