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Greece Cut to Junk at S&P as Contagion Spreads (Update2)
Let's hope this isn't prescient for the U.S. economy. Lowered bond ratings will make interest on debt sky high. Bondholders may only recoup 30% of invested value. Panic over swelling budget deficits. Unions have demanded too much in Greece. Too many entitlements. Sound familiar?April 27 (Bloomberg) -- Greece's credit rating was cut three steps to junk by Standard and Poor's, the first time a euro member has lost its investment grade since the currency's 1999 debut. The euro weakened and stock markets throughout the region plunged. Greece was lowered to BB+ from BBB+ by S&P, which also warned that bondholders could recover as little as 30 percent of their initial investment if the country restructures its debt. The move, which puts Greek debt on a par with bonds issued by Azerbaijan and Egypt, came minutes after the rating company reduced Portugal by two steps to A- from A+. Posted by: JohnQC 2010-04-28 |
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