Greek Bond Will Default: Fitch

Rating agency Fitch has said the euro-zone plan for private investor involvement in the Greek rescue package announced Thursday will result in a default rating.

In a statement released early Friday, the number-three credit ratings agency said it will reduce Greece as an issuer of bonds to "restricted default" if plans to roll over debt or implement debt swaps go ahead.

"An exchange that offers new securities with terms that are worse than the original contractual terms of the existing debt and where the sovereign is subject to financial distress constitutes a default," Fitch said in a statement.

This means the Greek government's rating as a sovereign issuer of debt will be placed into "restricted default." Separately, the Greek bonds affected by the new deal will be assigned default ratings "on the date that the offer period for the proposed debt exchange closes."

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- Posted: 2011-07-22 12:11:47

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