1. S&P cuts Greece rating after referendum called

S&P cuts Greece rating after referendum called

Standard & Poor's downgraded Greece's credit rating deeper into junk territory today, saying the government's decision to hold a referendum on creditor proposals brought it closer to default.

By: | Washington | Updated: June 30, 2015 11:15 AM
Greece bailout

Standard & Poor’s cut Greece’s already deeply-junk rating to ‘CCC-‘ from ‘CCC’. (Photo: AP)

Standard & Poor’s downgraded Greece’s credit rating deeper into junk territory today, saying the government’s decision to hold a referendum on creditor proposals brought it closer to default.

“We interpret Greece’s decision to hold a referendum on official creditors’ loan proposals as a further indication that the Tsipras government will prioritize domestic politics over financial and economic stability, commercial debt payments, and eurozone membership,” said S&P.

It cut Greece’s already deeply-junk rating to ‘CCC-‘ from ‘CCC’.

Absent unforeseeable favorable changes in Greece’s circumstances, “a commercial default is inevitable within the next six months,” the ratings firm said. In a rating downgrade earlier in June, S&P saw the likelihood of a commercial default within the next 12 months.

S&P said that the inability of Prime Minister Alexis Tsipras’s government to agree with its official creditors on a loan program was a sign that Athens would likely miss its payment obligations due on June 30, including the 1.5 billion euros ($1.7 billion) to the International Monetary Fund.

“Given that the government appears willing to accept the consequences on its banking sector and economy from the failure to reach an agreement, we now see a 50 percent likelihood of Greece eventually exiting the eurozone,” it said.

S&P had cut Greece’s junk rating by one notch to ‘CCC’ on June 10 after the cash-strapped country delayed a debt payment to the IMF.

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Tags: Greece
  1. S
    Sivaramakrishnan
    Jun 30, 2015 at 2:06 pm
    S&P itself is a junk rating agencies... Not just S&P other rating agencies Moody's are good at postmortem never at proper diagnosis & treament.
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