A burden of Debt from the Euro Zone

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Eurozone

S&P Downgrades Greece Debt Further to CC
Greece moved from CCC to CC according to the latest sovereign credit rating by Standard & Poor’s (S&P). The rating agency cautioned on a possible default after the European Union (EU) agreed that the private sector would shoulder part of the burden of the rescue package that offers Greece more cash and easier loan terms to keep it afloat. Under the proposed restructuring for Greece, bondholders are expected to voluntarily swap their bonds for longer maturities at lower rates, called a “distressed exchange” according to S&P. As a result, the likelihood of a future default on the new securities is likely to remain high as Greece may continually be burdened by high debt to GDP amid uncertainty over its growth prospect.

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