Moody's Considers Greece To Have Defaulted After Debt Exchange

Source: Wall Street Journal

The ratings firm said the exchange represents a "distressed exchange" and therefore is a debt default.

Moody's noted it expects a similar debt exchange to proceed with foreign-law bondholders, as well as the holders of state-owned enterprise debt that has been guaranteed by the state, in the coming weeks.

The firm noted 85.8% of debtholders holding Greek-law bonds had agreed to the exchange. The terms of the exchange entailed a discount of at least 70% on the net present value of existing debt, Moody's said.

Last week, Moody's downgraded Greece's sovereign-debt rating to C, its lowest possible rating short of default. Moody's on Friday said it will revisit the country's rating in due course to assess the impact of the exchange on the sustainability of Greece's debt burden, as well as other factors.

Read more: http://online.wsj.com/article/BT-CO-20120309-714773.html