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.

Follow up:

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.

John Lounsbury

Sources:

• 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)