S&P Downgrades Greece To Lowest Possible, Worst Than Jamaica, Pakistan, Grenada; Warns 'Restructuring' is Default

Standard & Poor' has done it again. We have heard this story many times, but it was three notches today.

Greece is now officially lowest-rated country in the world in the rankings, ranked below Ecuador, Jamaica, Pakistan and Grenada.


It also warned it would view a likely debt restructuring as a default.
"S&P said European policymakers looked increasingly likely to impose a restructuring of Greece's debt -- either via a bond swap or by extending bond maturities -- as a means of having the private holders of Greek bonds share the burden".

"In our view, any such transactions would likely be on terms less favorable than the debt being refinanced, which we, in turn, would view as a de facto default according to Standard & Poor's published criteria,"
Reuters: "In such a case, S&P added, Greece's credit rating would be lowered to "selective default," or SD, while the ratings on the country's debt instruments would be cut to D.

It cut Greece's long-term sovereign credit rating to CCC, four steps away from default, from B. The short-term rating was affirmed at C and all ratings were removed from credit watch.

The move takes S&P's rating of Greece one notch below Moody's Caa1, while Fitch ranks Greece at B+. This makes Greece the lowest country in S&P's rankings.

S&P said the outlook on the long-term rating remained negative, a sign that another downgrade is likely in the next 12 to 18 months".