Moody's Gives Banks Greek Debt Warning

Wall Street Journal
July 5, 2011

Banks rolling over some of their Greek debt into new instruments may have to take impairment charges, Moody's Investors Service said Tuesday, in another setback for efforts to involve private bondholders in a new international bailout.

Rival rating firm Standard & Poor's Corp. on Monday rocked plans to involve the private sector in giving Greece more time to work out its fiscal problems by saying a proposal being promoted by French banks would likely put the country in "selective default."

Moody's still hasn't explicitly said the plan would result in a default. Tuesday it said it's "not a party to ongoing discussions on the Greek debt rollover," and that "any rating implications will be assessed through our published methodologies and definitions," only after authorities complete a plan.

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