Better than default .....

Small and medium-size Italian companies will be permitted to suspend payments on 3.6 billion euros ($4.4 billion) of debt for as long as a year, the Finance Ministry of Italy said on Saturday.

Since a loan moratorium began on March 1, Italian companies have made 16,000 applications to postpone 5.5 billion euros of payments, the ministry said. About 10,000 applications were processed through May, and the rest are being addressed.

The nation’s business associations and the Italian Banking Association agreed this year to extend an earlier moratorium to cope with the country’s fourth recession since 2001. The previous moratorium, begun in August 2009, allowed 260,000 companies to delay 15 billion euros of payments, the association said in February.

On Friday, Moody’s Investors Service lowered Italy’s government bond rating two steps. Moody’s said Italy faced higher financing costs amid crises in Greece and Spain.

http://www.nytimes.com/2012/07/15/business/global/loan-moratorium-approved-in-italy.html?_r=1&smid=tw-nytimesworld&seid=auto

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