S&P Cuts Greece To 'CC' On Likely "Selective Default"; Outlook Negative

March 25 - Greece Independence Day
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Here's an update on Greece's soon to be "selective default" status. Read the full report at standardandpoors.com. A login may be required. EUR/USD is currently down 1.03% at 1.43607 and the S&P fell over 2.03% today with no decision yet on the debt ceiling.

"LONDON (Standard & Poor's) July 27, 2011--Standard & Poor's Ratings Services today lowered its long-term sovereign credit rating on the Hellenic Republic to 'CC' from 'CCC'. At the same time we affirmed the short-term rating at 'C'. The outlook is negative. Our recovery rating of '4' for Greece remains unchanged, indicating an estimated 30%-50% recovery of principal by bondholders, including on those bonds subject to a 20% reduction in net present value (NPV) as estimated under the Institute for International Finance (IIF) proposal.

Following review of the European Council's (EC's) July 21 statement, Standard & Poor's has concluded that the proposed restructuring of Greek government debt would amount to a selective default under our rating methodology. We view the proposed restructuring as a "distressed exchange" because, based on public statements by European policymakers, it is likely to result in losses for commercial creditors. Moreover, the objective of the debt exchange/rollover is to reduce the risk of a near-term debt payment default and to give the Greek government more time to undertake fiscal consolidation and policy reforms. Under our criteria, we characterize a distressed borrower as one that would--in the absence of debt relief--fail to pay its debt on time and in full."