Fitch Downgrades Greece From C To Restricted Default - Full Text

Tyler Durden's picture

It is not shocking that the worst of the worst rating agency has downgraded Greece to "Restricted Default" following the imposition of coercive measures to generate a "voluntary" restructuring. It is very shocking that Fitch had Greece at C until now...

Fitch Ratings-London-09 March 2012: Fitch Ratings has downgraded Greece's Long-term foreign and local currency Issuer Default Ratings (IDRs) to 'RD'
('Restricted Default') from 'C' following today's confirmation from the Greek government and eurozone officials that the exchange of Greek government bonds will proceed.
The downgrade to 'RD' reflects Fitch's previous commentary that the exchange would constitute a sovereign default event under the agency's distressed debt exchange (DDE) rating criteria, and follows the downgrade of Greece to 'C' from 'CCC'  on 22 February. Greece's Short-term foreign currency IDR remains unchanged at 'C'. The euro area Country Ceiling, which is applicable to all euro area member states, also remains unchanged at 'AAA.'
Under the exchange, each EUR100 face value amount of Greek government bonds will be exchanged for new bonds with a face value of EUR31.5 and EUR15 of EFSF
('AAA') notes. Bondholders will also receive a notional EUR31.5 of Greek GDP-linked securities. The implied loss relative to the original terms and conditions of the bonds implied by the exchange is estimated by market participants to be approximately 74%.
Fitch has also downgraded the issue ratings of the tendered securities under the Greek-law bondholder exchange to 'D' from 'C', where they will remain for as long as the sovereign is rated 'RD' after which the ratings will be withdrawn.
The foreign-law bond exchange offer does not close until 23 March and the issue ratings on these securities will therefore remain at 'C' until exchanged on the
11 April, after which they will be rated 'D' and the ratings subsequently withdrawn. The issue ratings of securities not eligible for the bond exchange remain unchanged.
The settlement date for Greek-law exchanged bonds - when new Greek government bonds will be issued - is Monday 12 March. Following completion of the debt exchange and the issue of new securities, Fitch will raise Greece's IDR out of 'RD' and assign ratings to the new securities consistent with the agency's forward-looking assessment of Greece's credit profile following the distressed debt exchange. The post- exchange IDR and securities ratings are likely to be low speculative grade.
These actions are in line with Fitch's statement on 6 June 2011 (see 'Fitch Outlines Rating Approach to a Sovereign Debt Exchange') and the agency's Distressed Debt Exchange Criteria (12 August 2011).

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Christoph830's picture

Hey Fitch, FYI:  We also landed on the moon

Mr Lennon Hendrix's picture

The moon is a satellite brought here by alien Jews to make our brains not work good!  David Icke told me so.

trav7777's picture

water is long before S&P and Moodys follow suit?  Month?

Harlequin001's picture

I must admit, I did a double-take on this headline before I realised what it said. Rated C?

You must be pissed...

Manthong's picture

Definition for ”restricted”: “keep within limits”.

Restricted default is like restricted death.

                    The vitality is gone but the decay continues.

Bellaraphon's picture

S&P already has Greece at Restricted Default, no?

resurger's picture

since when it was down!!! the bid is disabled

battle axe's picture

Also the world is not flat, this guy Columbus gave me the straight scoop.

Mr Lennon Hendrix's picture

Yeah, Columbus, says the history books.  There weren't many European tribes that made the voyage thousands of years before or anything.  It wasn't the Polyneseans who sailed to Hawaii which happens to be in the middle of nowhere.  It was that crazy Columbus.


"Restricted default". I "restrict" you from triggering CDS.

Mr Lennon Hendrix's picture

You will never restrict me from riding my fire breathing unicorn, nay.

Harlequin001's picture

Oh, so you've got one too, huh?

I was told by my bond trader that mine was fucking unique...

Rainman's picture

True default is only proclaimed for a double double restricted default....about 3 months from now.

Hammerabi's picture

and I heard old Ludwig van was real horrorshow on the ivories.


JailBank's picture

Shock! SHOCKED!!!

firstdivision's picture

Fitch Ratings Group, always late to the party since 1913.

fockewulf190's picture

How in the world can this company stay in business with this kind of piss poor performance. They must be getting greased by Merkozy for playing ball their way.

Debeachesand Jerseyshores's picture

Disclosure: I don't have any Greek Bonds in my portifolo. Thank God.

Dr. Engali's picture

Hmmm.... It may have been good if they had downgraded them before investors got wiped out. Just a thought.

SumSUN's picture

Hmm.  From "C" to "RD".....   I'm glad I have the whole day ahead to think about this.

t_kAyk's picture

I'm sorry, what were you saying?  These 'Snorg' girls are quite distracting... 

vincent's picture

Well, that would have meant default. Can't have that now.

espirit's picture

From the Greeks...

"Party On."

DavidC's picture

Forgive my English, but how the FUCK is this stock market holding up?!


Dr. Engali's picture

There is no such thing as a stock market any more. It's a policy tool. The Bernank has guaranteed gains.

resurger's picture

and when we go long, we expect the bernanke magic Put!

Fuck those mother fuckers ....


Overflow-admin's picture

CDS champagne for everyone! Oh I mean cascades, not champagne, sorry.

sessinpo's picture

ISDA, the corrupt ratings agency (not correctly called that) that matters until that market participants finally decide to quit the ponzi scheme and take the ball home.

valley chick's picture

at what time does the talks begin about the CAC/CDS ? 

Overflow-admin's picture

It's been kicked to around march 20-23

BTW I can't wait for the updated data!

valley chick's picture

thanks for sharing the link. :)  Uh oh...reality

Overflow-admin's picture

Yup, 5-year reality check is stunning O_o

Tremain's picture

So anybody know what happened to the 1:00 ISDA announcement?

Overflow-admin's picture

Maybe they cought all acute laryngitis ^^



Just shoot them all in the head and they won't come back!

DutchDude's picture

Still pending...

They're sh*tting their pants i guess...

LongSoupLine's picture

bullish, as market agotards create large vertical green candles on ES.  Fucking horseshit!

Moneyswirth's picture

Way to rain on the parade Fitch.  We just had an awesome NFP print this morning, the economy's booming again.  We dont want to be distracted by global economic implosions.


Al Huxley's picture

'Hey, do you think those Greek bonds are ok?' 

 'Well, countries broke, and just did a coercive restructuring of their debt, bilking the previous set of suckers out of 80% of their money, but Fitch says they're ok, so it should be fine to buy - oh wait, they just downgraded them - cancel that order'. 

Anybody who needs Fitch (or any of the ratings agencies for that matter) to tell them how safe greek bonds are deserves whatever they get.

zrussell's picture

This has been a long-standing cover-up. Columbus DID fall off!

ejhickey's picture

Oh NO!  greece has lost its steller "c" rating !

NotApplicable's picture

"Beware the IDRs of March!"

DutchDude's picture

Greece is the sunniest money laundromat in town...