Econintersect: Recently the Greek national debt had been rated as "selective default." But Tuesday (18 December 2102) credit rating agency Standard & Poor‘s (S&P) reported Tuesday that it had upgraded Greek debt to B-. The reason for the upgrade was the recent successful bond buy-back by that country. The upgrade skipped the CC and CCC rating levels which indicate vulnerable and highly vulnerable to financial and economic conditions. The B rating indicates the obligor has vulnerability to impairment if adverse financial and economic conditions occur.
According to Bloomberg, this was the highest rating for Greek debt in the past 17 months.
Here is a summary of the action from the S&P press release:
- Greece has completed a distressed debt buyback.
- Following completion of the transaction, we are raising our long- and short-term sovereign credit ratings on Greece to 'B-/B' from 'SD' (selective default).
- The upgrade reflects our view of the strong determination of European Economic and Monetary Union (eurozone) member states to preserve Greek membership in the eurozone.
- The outlook on the long-term rating is stable, balancing our view of the government's commitment to a fiscal and structural adjustment against the economic and political challenges of doing so.
- S&P upgrades Greek credit rating on strong bond buy-back (Johannes Haller, Europe Online Magazine, 18 December 2012)
- Greek Credit Rating Raised at S&P After Debt Buyback Program (Marcus Bensasson, Bloomberg, 18 December 2012)
- General Criteria: Understanding Standard & Poor's Rating Definitions (Standard & Poor's)
- Ratings On Greece Raised To 'B-/B' From Selective Default On Completion Of Debt Buyback; Outlook Stable (S&P press release, 18 December 2012)