Greece was downgraded by Moody's to Caa1. Only Ecuador is rated lower at Caa2. It defaulted in 1999 and 2008. Credit default swaps on Greece are now more expensive than Venezuela. For this rating, there is a a 50% chance that it will default over the next five years. The chance that Greece will survive is a flip of the coin for Moody's even after all of the help from the other European countries.
How much money is now needed to move the dial toward a lower probability? It is not clear. At this rating, the odds are more likely that a restructuring will be necessary. Little help will come from the ECB who will not take Greek bonds as collateral, and it will be harder for all countries to agree on terms for such low-rated debt.
A "reprofiling" will be necessary. It is just a matter of how much restructuring will be done.
How much money is now needed to move the dial toward a lower probability? It is not clear. At this rating, the odds are more likely that a restructuring will be necessary. Little help will come from the ECB who will not take Greek bonds as collateral, and it will be harder for all countries to agree on terms for such low-rated debt.
A "reprofiling" will be necessary. It is just a matter of how much restructuring will be done.
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