It’s just now hitting after US Markets closed today, the S&P has downgraded Greece. The Greek sovereign debt had been carrying a rating of CCC and it’s now been released that S&P has cut it to “selective default.” Everyone is looking for official statements from the S&P to hear more detail on the rating drop for Greece.
This is a big blow to Greece as they have been teetering on proposal after proposal to keep afloat from their massive debt load. Business Insider revealed that a conversation with an S&P Representative said that they currently don’t have access to their press releases internally due to a downed system. This could produce more delays but reports are still trickling out about how this Greece “Selective Default” could have wider implications.
The WSJ has reported that this likely won’t spin into and actual Greece default but have reduced value returns on original securities. The word used to describe the securities as, “distressed.” It’s also rumored that the “Selective Default” rating could be bumped back to CCC rating with S&P once a buyback is complete.
This hasn’t been the first time that Greece has faced the “Selective Default” grading from S&P. The last time that Greece restructured their debt in February 2012 the rating was also lowered to a selective default. The CCC rating was brought back for Greece Sovereign debt in May of 2012. Things have been turning sour and some expected this new rating but it is still a surprise to many. In an interview from WSJ Adrian Miller from GMP Securities in New York said, “It’s a technical move and not necessarily an indication of an actual default.” What do you think? Could this indicate one of the final times that Greece gets bumped down to this rating and further bring on a full Greece default?
Inside Story – Will Greece default on its debts?
Greece workers are on strike as negotiations continue to finalise a deal for a new bailout. But time is fast running out. What are the risks of a default, and the possibility of bankruptcy? Guests: Ann Pettifor, George Kapopoulos and Matina Stevis.
‘Greece better off in default & outside Eurozone’
RT’s Sophie Shevardnadze talks to the winner of the Nobel prize for economics, Kenneth Joseph Arrow, about how he thinks the Eurozone debt crisis should be tackled.