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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 DOWNGRADES GREECE TO 'RESTRICTED DEFAULT' FROM 'C'
 
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to 'D' from 'C', where they will remain for as long as the sovereign is rated 'RD' after which the ratings will be withdrawn.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11 April, after which they will be rated 'D' and the ratings subsequently withdrawn.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 | Link to Comment Christoph830
Christoph830's picture

Hey Fitch, FYI:  We also landed on the moon

Fri, 03/09/2012 - 11:15 | Link to Comment 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 | Link to Comment Dr. Engali
Dr. Engali's picture

Stoooped but funny.

Fri, 03/09/2012 - 11:33 | Link to Comment trav7777
trav7777's picture

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

Fri, 03/09/2012 - 11:42 | Link to Comment 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 | Link to Comment 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 | Link to Comment Bellaraphon
Bellaraphon's picture

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

Fri, 03/09/2012 - 11:31 | Link to Comment resurger
resurger's picture

lol

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

Markets up..go figure.

Fri, 03/09/2012 - 11:44 | Link to Comment resurger
resurger's picture

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

Fri, 03/09/2012 - 11:16 | Link to Comment 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 | Link to Comment 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 | Link to Comment SHEEPFUKKER
SHEEPFUKKER's picture

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

Fri, 03/09/2012 - 11:26 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Hammerabi
Hammerabi's picture

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

WWGD

Fri, 03/09/2012 - 11:13 | Link to Comment JailBank
JailBank's picture

Shock! SHOCKED!!!

Fri, 03/09/2012 - 11:14 | Link to Comment firstdivision
firstdivision's picture

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

Fri, 03/09/2012 - 15:06 | Link to Comment 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 | Link to Comment Decay is Constant
Decay is Constant's picture

OK....so now what?

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

A sterilized LTRO.

Fri, 03/09/2012 - 11:16 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment azzhatter
azzhatter's picture

Oh, no!!

Fri, 03/09/2012 - 11:18 | Link to Comment 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 | Link to Comment vincent
vincent's picture

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

Fri, 03/09/2012 - 11:18 | Link to Comment espirit
espirit's picture

From the Greeks...

"Party On."

Fri, 03/09/2012 - 11:21 | Link to Comment DavidC
DavidC's picture

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

DavidC

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

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

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

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

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

It's been kicked to around march 20-23

BTW I can't wait for the updated data! http://www.bloomberg.com/quote/CGGB1U5:IND/chart

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

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

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

Yup, 5-year reality check is stunning O_o

Fri, 03/09/2012 - 11:22 | Link to Comment Tremain
Tremain's picture

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

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

Maybe they cought all acute laryngitis ^^

 

Their announcment: HHHHHHHHHHHHHHHHHHHHHHHHHHHH

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

Fri, 03/09/2012 - 11:29 | Link to Comment DutchDude
DutchDude's picture

Still pending...

http://www.isda.org/dc/requests.asp

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

Fri, 03/09/2012 - 11:28 | Link to Comment LongSoupLine
LongSoupLine's picture

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

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

Priced in

Fri, 03/09/2012 - 11:30 | Link to Comment 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 | Link to Comment 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 | Link to Comment zrussell
zrussell's picture

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

Fri, 03/09/2012 - 11:47 | Link to Comment ejhickey
ejhickey's picture

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

Fri, 03/09/2012 - 11:47 | Link to Comment NotApplicable
NotApplicable's picture

"Beware the IDRs of March!"

Fri, 03/09/2012 - 11:48 | Link to Comment DutchDude
DutchDude's picture

Greece is the sunniest money laundromat in town...

Fri, 03/09/2012 - 11:49 | Link to Comment 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.

 

http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref

Fri, 03/09/2012 - 11:54 | Link to Comment 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 | Link to Comment DutchDude
DutchDude's picture

CDS : Can't Default Suckerzzzz!!!

Fri, 03/09/2012 - 12:02 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment JohnKozac
JohnKozac's picture
"Is There Anything More Useless Than A Rating Agency ?"

 

http://seekingalpha.com/article/310865-is-there-anything-more-useless-th...

Fri, 03/09/2012 - 13:08 | Link to Comment tocointhephrase
tocointhephrase's picture

Yes, one that actually rates!

Fri, 03/09/2012 - 14:39 | Link to Comment bugs_
bugs_'s picture

Soon to be rated V for Vaporized

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