S&P Lowers Greek Credit Ratings 3 Notches to "CCC"
June 15, 2011
Standard & Poor's credit ratings lowered its rating for Greek debt even further into junk status, dropping the country 3 notches to "CCC" in another sign that the country will be forced to default on its debt.The CCC rating is described as meaning the debt is "extremely speculative," is of "poor quality," with a possibility of default, and any further cuts would indicate that the country was engaging in "selective defaults."The IMF said in a statement, "Standard & Poor's decision to cut the credit rating of Greece today makes reference to rumors and statements by representatives of the European Commission and European Central Bank. However, the decision ignores the intense consultations taking place currently between the same institutions and the IMF aimed at designing a viable solution that will cover the financing needs of Greece in the coming years."Germany, the most dominant member of the 17 country Euro zone, is proposing that private sector bond holders accept some form of a loss on their Greek bonds as a condition for a broader rescue package that could grow to be as large at 100 billion Euros.The S&P said any form of debt exchange would be seen as harmful to creditors and thus, in their eyes, would be equal to a form of default. S&P said if that occurred, Greece's rating would be dropped to D.The new rating makes Greece the lowest-rated sovereign debt currently covered by Standard & Poor's.