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Greece angered by S&P rating cut
Investors in Greek debt may have to write-off 50pc of their loans "or more" if financial stability is to be restored to the beleaguered country, a leading rating agency warned. Standard & Poor's said that "there is increased risk that Greece will take steps to restructure" its 110bn (£97bn) bail-out package which would result in a "distressed exchange" for bondholders. At the same time, the rating agency cut Greece's credit rating from BB- to B, dragging its debt further into junk territory to reflect its more gloomy views. Greece hit back at the downgrade, angrily denying any imminent restructuring. The Greek finance ministry said that there have been "no new developments or decisions since the last rating action" by S&P a month ago so the agency's views were "not justified." In a statement, the ministry added: "Decisions by ratings agencies must be based on objective data, policy makers' announcements and realistic assessments on the conditions facing an economy... When such decisions are based simply on rumours, their validity is seriously cast in doubt". The fresh fears were sparked after it emerged over the weekend that secret talks had taken place in Luxembourg on Friday between Athens and some of the key European financial leaders. Rumours quickly spread that Greece had said it will not be able to raise 22bn by next year to meet its repayment schedule and was seeking a re-negotiation of the rescue package. Posted by: tipper 2011-05-10 |
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