Tuesday, March 29, 2011

S&P Downgrades Greece, Portugal, Euro-Zone Woes Rise

Wall Street Journal
March 29, 2011

The euro-zone is getting another kick in the shins, this time from ratings agency Standard & Poor’s.

S&P downgraded its rating on Greece’s long-term debt two notches to BB- from BB+, pushing the nation’s debt deeper into the junk zone. Meantime, it trimmed Portugal’s rating to BBB- from BBB, placing Lisbon’s long-term debt rating at the lowest possible investment-grade level.

The ratings agency said it was “highly likely” that Greece will remain in need of assistance after 2013, by which time the Eurocrats are expected to have a new rescue fund in place. The view is that rescues post-2013 will require bondholders to accept losses, which S&P tartly calls “detrimental” to bondholders. Duh.


No comments: