Financial Times
May 9, 2011
Standard & Poor’s has cut Greece’s credit rating by two notches, warning that any voluntary debt restructuring by Athens would amount to a default.
The US rating agency said that any demands from the eurozone’s biggest countries for Athens to extend the debt payment maturities on its bail-out loans from a year ago would probably lead to similar demands on private creditors. “Such private-sector burden sharing would likely constitute a distressed exchange ... for which we assign a rating of selective default,” S&P said.
The downgrade to B, six notches into junk territory, comes after European politicians acknowledged publicly that Greece’s €110bn rescue package was insufficient and more help would be needed.
On Monday the European Central Bank became the latest institution to throw its weight behind a revamped assistance programme for Greece.
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