Greece Likely to Be Rated in Default: S&P

Whatever debt swap arrangement Greece can work out with its creditors will likely still leave it with a default rating, according to John Chambers of Standard & Poor's. Also, since the debt level remaining after the conclusion of the deal will still be quite high, the country's rating will remain low.

Bloomberg reported that Chambers, managing director of sovereign ratings at S&P, discussed the Greek debt situation at the Bloomberg Link Sovereign Debt Conference in New York on Tuesday. He was quoted saying, "The very least that would happen in Greece is an exchange that would qualify by our criteria as a default. Their debt burden is still going to be very, very high. So their rating post-default will still be a low rating."

Thomas Cooley, an economics professor at New York University, was quoted saying at the conference that while "the contemplated restructuring isn't likely to be sufficient to make Greece a viable, going economic concern in the future," a decision not to cause credit default swaps to trigger may also be a form of "collateral damage" from the nation's default. He added, "The future viability of that market is really undermined by what's been going on around Greece."