S&P raises Greek rating, lifting it out of default

ATHENS (Reuters) - Standard & Poor's raised Greece's credit rating to low-speculative grade on Wednesday, lifting it out of default territory as expected, after Athens completed the biggest sovereign debt restructuring in financial history.

Standard & Poor’s raised Greece’s credit rating out of default territory after Athens slashed its debt by the biggest sovereign debt restructuring in financial history.

ATHENS (Reuters) - Fitch on Friday cut Greece's rating to "restricted default" over its debt swap deal, as expected, becoming the third of the three major rating agencies to slash Greece into default territory. Fitch said in a statement it would upgrade Greece's rating once the debt exchange was completed and the new securities have been issued, adding that the new rating was likely to be low speculative grade. (Reporting by Ingrid Melander)

Marc Chandler submits:The Depository Trust and Clearing Corp. provides a central register for credit default. A recent report indicated that there are about $5 bln of outstanding Greek sovereign CDS. Greek debt in dollar terms is about $483 bln, meaning the CDS covers about 1% of Greece's sovereign debt. The size of the sovereign CDS market is much smaller than one might expect. Consider Italy: DTCC estimates its sovereign CDS market is about $25 bln. The outstanding debt is around $2.3 trillion.

Argentina may learn at any time whether a U.S. appeals court will rule that it must pay US$1.4-billion to holders of its defaulted debt, something the South American country has resisted for more than a decade.

I can't help laughing at the Financial Times headline story Athens threat to bond holdouts. Greece has threatened to default on any of its bondholders who do not take part in this week’s €206bn debt restructuring, raising the pressure on potential holdouts.

Sovereign default experiences are a staple in international finance. Here are a couple bits of information from a vast literature. First, from Asonumo (2009): ...we cover stylized facts of serial defaults, especially some features di¤ering by countries’history of defaults. Figure 2 reports external debt-to-GDP ratio, bond spreads and credit ratings.