Nation of Greece slapped with world's lowest credit rating
'Greece will default -- it's a question of when, rather than if,' expert says
The nation of Greece has been accused of throwing the European Common
Market into chaos due to its poor fiscal practices. Greece has since
been branded with the world's lowest credit rating by Standard &
Poor. S & P said the nation is "increasingly likely" to face a debt
restructuring and the first sovereign default in the euro area's
'Greece will default -- it's a question of when, rather than if,' Vincent Truglia, Managing Director at New York-based Granite Springs Asset Management LLP said.
Greece's government, which plans to sell $1.8 billion worth of 26-week Treasury bills, said that the downgrade overlooked "intense" talks between European officials to address the nation's financing needs.
"Greece will default -- it's a question of when, rather than if," Vincent Truglia, Managing Director at New York-based Granite Springs Asset Management LLP said. Truglia is the former head of the sovereign risk unit at Moody's. "It's a basic solvency issue rather than a liquidity issue. Only a debt write-down will do."
The yield difference, or spread, between 10-year German bunds and Greek securities of a similar maturity was at 1,402 basis points yesterday, close to a record.
No other sovereign nation has ever been graded as low as CCC by S&P, a spokesman said by e-mail. Moody's cut its rating on Greece to Caa1 on June 1, leaving only Ecuador as a worse sovereign risk.
"The ratings agencies are now playing catch-up with the market," Gianluca Salford, a fixed-income strategist at JP Morgan in London said. "The market is pricing in a very high probability that there will be a credit event around Greece. The agencies are just catching up to the negativity that's already priced in by the market, not the other way around."
The downgrade comes as the European Central Bank and Germany battle over how to bail out Greece again and whether officials should push creditors to share some of the costs. ECB President Jean-Claude Trichet said yesterday that his advice to European governments is to "avoid what would be a compulsory concept" and "avoid whatever would trigger" a default.
- - -
Pope Benedict XVI's Prayer Intentions for January 2013
General Intention: The Faith of Christians. That in this Year of Faith Christians may deepen their knowledge of the mystery of Christ and witness joyfully to the gift of faith in him.
Missionary Intention: Middle Eastern Christians. That the Christian communities of the Middle East, often discriminated against, may receive from the Holy Spirit the strength of fidelity and perseverance.
Keywords: Greece, European Market, Standard & Poor, illiquidity, default
Rate This Article
Leave a Comment
More Europe News
- Historic Meeting between Pope Francis and Coptic Patriarch, Tawadros II, Fosters Christian Unity
- Pope Francis Shakes up the Ambassadors Meeting and Addresses Economic Issues
- AU CONTRAIRE! Economic crisis has been 'pulling European public opinion apart'
- Pope Calls Whole Church to Encounter Jesus Christ Personally Through the Holy Spirit
- France ponder one percent 'Internet tax' to fund domestic computer production
- Pope Francis Canonizes 802 Saints: 800 Martyrs of Otranto and Two Latin American Foundresses
- Growth in Number of Catholics Worldwide, Along with Priests and Deacons
- Scientists confirm that Roman Empire was destroyed by plague
- Unemployed youth in Greece now above 60 percent
- Fr. Paul Schenck: Finding Living Faith on Catechetical Sunday
- The Movie Yellow: Incest as 'Normal' and Cassavates's Slides Into the World of Woes
- The Chicago School Teachers Strike Reveals the Need For School Choice
- The Sexual Barbarians and the Dissolution of Culture
- The Happy Priest Challenges Us to Ask: Who is Jesus to Me?
- Michael Coren on Canadian Public Schools: Teachers, leave those kids alone
- We Cannot Ignore Our Consciences: Cardinal Dolan On Religious Liberty
- In the Face of Danger, Successor of Peter Travels to Lebanon as a Messenger of Peace
- Reflections on the Dignity and Vocation of Women: Who or What?