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Fitch Downgrades Greece To BBB-
Fitch Downgrades Greece to 'BBB-'; Outlook Negative
2010-04-09 14:28:26.476 GMT
FITCH DOWNGRADES GREECE TO 'BBB-'; OUTLOOK NEGATIVE
Fitch Ratings-London-09 April 2010: Fitch Ratings has today downgraded Greece's Long-term foreign and local currency Issuer Default Ratings to 'BBB-' from 'BBB+'. The Outlook is Negative. The agency has simultaneously affirmed Greece's Country Ceiling at 'AAA' and the Short-term foreign currency IDR at 'F2'.
The downgrade reflects the intensification of fiscal challenges in response to more adverse prospects for economic growth and increased interest costs. It also reflects ongoing uncertainties about the government's financing strategy in the context of increased capital market volatility.
The sharp rise in interest rates faced by the government this year, in combination with a deterioration in the outlook for economic growth, will make it harder for the government to achieve its fiscal targets of reducing the deficit to 8.7% of GDP this year and ensuring that public debt peaks at just over 120% of GDP in 2010 and 2011. Pressures on the banking system underline the adverse spill-over from sovereign risk concerns on the wider economy, while contingent liabilities from the banking sector will increase as the government provides banks with increased guaranteed funding.
Fitch recognises some early indications of improvements in fiscal outturns and the strength of the government's commitment to fiscal consolidation measures, which have been supported by Greece's euro area peer governments. However, given that the credibility of the fiscal consolidation effort will only be established by sustained deficit reduction over a prolonged period of time, it is vital that the Greek authorities import credibility from external institutions, underpinned by a credible commitment of financial support. The agency reiterates the lack of clarity regarding the mechanism for timely external financial support may have hindered Greece's access to market finance at affordable cost and hence further undermined confidence in the capacity of the government to meet its fiscal targets. While Fitch judges that external financial support is likely to be forthcoming, greater clarity on back-stop financial support in the form of an explicit IMF programme is likely to be required to shore up market confidence in the face of still substantial near-term financing needs.
The Negative Outlook reflects substantial uncertainties remaining over the prospects for sustained fiscal consolidation over the medium term.
Applicable criteria, 'Sovereign Rating Methodology', dated 16 October 2009, are available on www.fitchratings.com.
Contact: Chris Pryce, London, Tel/email: + 44 20 7417
4342/chris.pryce@fitchratings.com; Paul Rawkins, +44 20 7417
4239/paul.rawkins@fitchratings.com
Media Relations: Julian Dennison, London, Tel: +44 020 7682 7480, Email:
julian.dennison@fitchratings.com; Peter Fitzpatrick, London, Tel: + 44 (0)20
7417 4364, Email: peter.fitzpatrick@fitchratings.com.
Additional information is available on www.fitchratings.com.
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Fitch trying to get ahead of it, hee hee.
who cares? freddie couples is wearing spikeless shoes with no socks!
I love the idea that a 50 year old Master is showing the young pups how to play Golf on a "long" course designed to chop Fred Couples off at the knees.
Freddie has always been a very long hitter and still is. I'm old enough to remember when they called him "Boom Boom".
Agreed BUT that was many years ago and he is not hitting as long as he did just 5 years ago by his own admission. He should not being doing as well as he is, which just goes to show the game is played between the ears and less so on the course. Watching his interview yesterday after his round, he was talking about his short game and his putting.
How about a 60 year old Tom Watson firing a 67 yesterday? I find that amazing.
Bingo! EU looks like a gun-powder-barrel
Yea well we Fitch dudes told'em to go get some cash off EU or IMF ASAP in the last few days
Double post oops, my apologies
Grasshopper, never waste a double post. Add to your comments or come up with a new one. :>)
14-21% yield on short term Greek debt?, and NOW Fitch slaps a downgrade on Greece?
What good are rating agencies for, anyway?
The patina of propriety?
Moodies is really behind the 8-ball now.
in all seriousness, fitch could actually earn some semblance of reprieve if they would downgrade any of the dozen other countries that will be next
but rather than doing that which would entail facing and dealing with economic reality, which might cause us consumers to stop spending money they dont have for 30 seconds and imperil the fake recovery that is in motion causing it to collapse under its own weight immediately rather than 6 months from now, they will issue releases saying "as far we can tell no one else is in the same trouble as greece", which ofcourse, an 8 year old with access to microsoft excel knows to be patently absurd
Greece @ BBB-? Double-plus-bullish!!
Definitely. SPX --> 1200 on tap for Monday, and mebbe a nice yuro pop as well once the duct-tape and chewing-gum Greek fix is unveiled over the weakend.
Stoxx 50 just went vertical.
Wow BBB- not F----. 'Well, you probably won't get your principal back, but the spread over the Bund is awesome, so until they default, its a pretty great deal'.
And the EUR/USD rallies upwards.
OT - Inflationista/ZimbabweDollar/git-yer-physical-NOW alert:
Wal-Mart Stores Inc. is cutting prices on thousands of products in an aggressive campaign to reinforce its reputation as a discount leader, as the company seeks to reverse months of slowing U.S. sales.
http://online.wsj.com/article/SB1000142405270230419800457517227168234706...
Fitch downgrades because of uncertainty over details of EU/IMF backstop plan- does that mean if he gets the details on monday he will have to upgrade again?
The rating agencies (Fitch, Moody's, S&P) are best rear-view mirrors money can buy.