Tuesday, August 16

Greece suffers new credit downgrade

ATHENS, Greece standard and poor's on Wednesday relegated Greek Government bonds at the lower end of junk-s status, reduction of the country with debts crippled credit rating of 2 notches on CC, with a negative Outlook.

The international rating agency said that a proposed restructuring of Greece would be EUR 109 billion ($157 billion) by default on selective heavy debt burden under a second international bailout deal. Both have said the same thing much other major rating agencies.

A standard and poor the statement also said the possibility of a future Greek standard is likely remain high.

Under the debt relief deal, which met last week in Brussels take the bailout banks and other private investors some 50 billion € ($ 72 billion) to the until 2014 by Exchange of Greek bonds with lower interest rates or easily keeping them for new par value lower

"Standard and poor's came to the conclusion that the proposed restructuring of the Greek government debt would amount to a selective default under our rating methodology" the rating agency said. "We see the proposed restructuring as a"distressed Exchange"because of public declarations of European policy, it is probably to losses for commercial creditors lead."

On Monday rating agency of Moody's downgraded Greece of three notches and earlier warned that it will almost inevitably be the country in standard is - according to the new rescue package are taken into account.

There was no immediate comment from Athens. Respond to Moody's downgrading, Government spokesman Elias Mossialos it had said, was "no practical value," argue that domestic creditors can now count on secure lines of credit.

He also proposed that Greece should cancel his subscription to international rating agencies.

Greece brush with standard will use first humiliating for a country function. But the immediate practical consequences of the evaluation for Greece should be limited.

The overriding fear that because of the bad rating, already fighting Greek banks, the European Central Bank emergency liquidity would be frozen operations was for weeks.

However, last week euro area found a way to this threat promised, temporarily 35 billion € ($ 50 billion) deposit with the ECB used to enhance the creditworthiness of non-performing bonds as collateral by the Greek banks, was lifted up to the standard assessment guide.

Crucial for Greece and Europe as a whole international swaps and Derivatives Association, a trade association, said the new rescue deal is not expected payment of bond insurance-trigger, because private sector involvement is voluntary.

Earlier Wednesday, appointed Greece, BNP Paribas, Deutsche Bank and HSBC act as dealer manager for a voluntary private sector participation scheme under the second financial security.

Cleary Gottlieb Steen and Hamilton LLP was appointed you international legal advisor, while Lazard Freres of the financial adviser will be.

Under the voluntary plan, banks and other large private investors be swap Greek bonds for new securities with longer maturities.

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