S&P Threatens Greece With Downgrade If Bond Spreads Are Not Quickly Reduced

Life for Greek administrators can not be much fun these days - anywhere they look they just see more bad news. The latest comes from (appropriately named if you are Greek) S&P analyst Marko Mrsnik who told Reuters that "if the high borrowing cost persists and the consequent deviation from the consolidation path is not addressed, this would in our opinion, delay the reversal of the government debt trajectory and could lead to lower ratings." Nothing yet from Moody's - should Greece and the linked NBG be downgraded even one more notch by Moody's then all sorts of colletaral trigger horrors will be triggered and the liquidity crisis will reach a whole new level of pain.

More from Reuters:

Greece is at risk of a rating downgrade if high borrowing costs persist and the government does not manage to address the consequent deviation from its deficit-cutting programme, a Standard and Poor's analyst said.

Asked if the highly indebted country was at risk of default, S&P's senior analyst for Greece Marko Mrsnik said: "No, at the current rating level, the risk of default is still very low."

Markets pounded Greek bonds and banking stocks on Thursday, driving its borrowing costs to new highs and pushing it closer to tapping a last resort EU-IMF safety net.

Mrsnik said Greece's sovereign rating depends on the full implementation of its austerity programme and on whether growth performance will be robust enough to support the consolidation effort.

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