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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to 'D' from 'C', where they will remain for as long as the sovereign is rated 'RD' after which the ratings will be withdrawn.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11 April, after which they will be rated 'D' and the ratings subsequently withdrawn.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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Fri, 03/09/2012 - 11:13 | 2239521 Christoph830
Christoph830's picture

Hey Fitch, FYI:  We also landed on the moon

Fri, 03/09/2012 - 11:15 | 2239528 Mr Lennon Hendrix
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.

Fri, 03/09/2012 - 11:21 | 2239555 Dr. Engali
Dr. Engali's picture

Stoooped but funny.

Fri, 03/09/2012 - 11:33 | 2239608 trav7777
trav7777's picture

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

Fri, 03/09/2012 - 11:42 | 2239633 Harlequin001
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...

Fri, 03/09/2012 - 11:48 | 2239648 Manthong
Manthong's picture

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

Restricted default is like restricted death.

                    The vitality is gone but the decay continues.

Fri, 03/09/2012 - 13:32 | 2240132 Bellaraphon
Bellaraphon's picture

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

Fri, 03/09/2012 - 11:31 | 2239602 resurger
resurger's picture


Fri, 03/09/2012 - 11:32 | 2239604 JPM Hater001
JPM Hater001's picture

Markets up..go figure.

Fri, 03/09/2012 - 11:44 | 2239644 resurger
resurger's picture

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

Fri, 03/09/2012 - 11:16 | 2239532 battle axe
battle axe's picture

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

Fri, 03/09/2012 - 11:20 | 2239544 Mr Lennon Hendrix
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.

Fri, 03/09/2012 - 11:21 | 2239556 SHEEPFUKKER

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

Fri, 03/09/2012 - 11:26 | 2239572 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

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

Fri, 03/09/2012 - 11:44 | 2239647 Harlequin001
Harlequin001's picture

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

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

Fri, 03/09/2012 - 11:31 | 2239601 Rainman
Rainman's picture

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

Fri, 03/09/2012 - 11:27 | 2239577 Hammerabi
Hammerabi's picture

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


Fri, 03/09/2012 - 11:13 | 2239522 JailBank
JailBank's picture

Shock! SHOCKED!!!

Fri, 03/09/2012 - 11:14 | 2239523 firstdivision
firstdivision's picture

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

Fri, 03/09/2012 - 15:06 | 2240555 fockewulf190
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.

Fri, 03/09/2012 - 11:14 | 2239526 Decay is Constant
Decay is Constant's picture now what?

Fri, 03/09/2012 - 11:16 | 2239531 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

A sterilized LTRO.

Fri, 03/09/2012 - 11:16 | 2239533 Debeachesand Je...
Debeachesand Jerseyshores's picture

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

Fri, 03/09/2012 - 11:16 | 2239534 Dr. Engali
Dr. Engali's picture

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

Fri, 03/09/2012 - 11:18 | 2239536 SumSUN
SumSUN's picture

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

Fri, 03/09/2012 - 11:18 | 2239538 azzhatter
azzhatter's picture

Oh, no!!

Fri, 03/09/2012 - 11:18 | 2239540 t_kAyk
t_kAyk's picture

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

Fri, 03/09/2012 - 11:18 | 2239541 vincent
vincent's picture

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

Fri, 03/09/2012 - 11:18 | 2239542 espirit
espirit's picture

From the Greeks...

"Party On."

Fri, 03/09/2012 - 11:21 | 2239547 DavidC
DavidC's picture

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


Fri, 03/09/2012 - 11:24 | 2239563 Dr. Engali
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.

Fri, 03/09/2012 - 11:30 | 2239595 resurger
resurger's picture

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

Fuck those mother fuckers ....


Fri, 03/09/2012 - 11:20 | 2239549 Overflow-admin
Overflow-admin's picture

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

Fri, 03/09/2012 - 11:22 | 2239557 sessinpo
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.

Fri, 03/09/2012 - 11:22 | 2239559 valley chick
valley chick's picture

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

Fri, 03/09/2012 - 11:24 | 2239567 Overflow-admin
Overflow-admin's picture

It's been kicked to around march 20-23

BTW I can't wait for the updated data!

Fri, 03/09/2012 - 11:30 | 2239594 valley chick
valley chick's picture

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

Fri, 03/09/2012 - 11:39 | 2239622 Overflow-admin
Overflow-admin's picture

Yup, 5-year reality check is stunning O_o

Fri, 03/09/2012 - 11:22 | 2239562 Tremain
Tremain's picture

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

Fri, 03/09/2012 - 11:27 | 2239569 Overflow-admin
Overflow-admin's picture

Maybe they cought all acute laryngitis ^^



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

Fri, 03/09/2012 - 11:29 | 2239590 DutchDude
DutchDude's picture

Still pending...

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

Fri, 03/09/2012 - 11:28 | 2239584 LongSoupLine
LongSoupLine's picture

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

Fri, 03/09/2012 - 11:29 | 2239587 the 300000000th...
the 300000000th percent's picture

Priced in

Fri, 03/09/2012 - 11:30 | 2239593 Moneyswirth
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.


Fri, 03/09/2012 - 11:42 | 2239635 Al Huxley
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.

Fri, 03/09/2012 - 11:45 | 2239651 zrussell
zrussell's picture

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

Fri, 03/09/2012 - 11:47 | 2239655 ejhickey
ejhickey's picture

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

Fri, 03/09/2012 - 11:47 | 2239656 NotApplicable
NotApplicable's picture

"Beware the IDRs of March!"

Fri, 03/09/2012 - 11:48 | 2239660 DutchDude
DutchDude's picture

Greece is the sunniest money laundromat in town...

Fri, 03/09/2012 - 11:49 | 2239664 AndrewCostello
AndrewCostello's picture

The ratings agencies, the governments and the central banks - this is all PURE ORGANIZED CRIME.  They are just doing whatever they want to keep the fraud going, and they don't even hesitate to lie anymore.  The whole thing is ridiculous.


The end of the paper fantasy is coming, and people should protect themselves.  Read this book and follow it to the word.

Fri, 03/09/2012 - 11:54 | 2239682 markalpha
markalpha's picture

The banks and Alliance Insurance AKA AIG for Europe managed to default Greace without triggering 87 percent of the  CDS contracts. This is a massive win for financials. Don't worry there will be law suits.

Fri, 03/09/2012 - 11:55 | 2239688 DutchDude
DutchDude's picture

CDS : Can't Default Suckerzzzz!!!

Fri, 03/09/2012 - 12:02 | 2239702 EmileLargo
EmileLargo's picture

Greece should never have been rated anything other than junk. What if a company had defaulted 91 times in the last 200 years? What rating would it get? Itsn't the purpose of a rating that it conveys the likelihood of default?

Fri, 03/09/2012 - 12:02 | 2239703 azzhatter
azzhatter's picture

That big titty girl from CNBC and LIESman were talking about what a success the deal was this morning. Her tits are big but her face is kind of knarly

Fri, 03/09/2012 - 12:15 | 2239762 Ovis Americanis
Ovis Americanis's picture

Yesterday it was all doom and gloom re: Greece. What happened to the carnage that was being virtually guaranteed here yesterday? Once again something that was not expected to happen happened and Greece avoids default and no CDS triggers. What gives?

Fri, 03/09/2012 - 12:20 | 2239779 JohnKozac
JohnKozac's picture
"Is There Anything More Useless Than A Rating Agency ?"

Fri, 03/09/2012 - 13:08 | 2240039 tocointhephrase
tocointhephrase's picture

Yes, one that actually rates!

Fri, 03/09/2012 - 14:39 | 2240424 bugs_
bugs_'s picture

Soon to be rated V for Vaporized

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