Greece: Ratings agency pours cold water over latest bail out plans

21st June 2011

Hope of preventing Greece from defaulting on its debts has been slapped down by the ratings agency Fitch.

Andrew Colquhoun, head of Asia-Pacific sovereign ratings with Fitch told the Guardian that European leaders' plans to allow Greek lenders to choose to buy new, longer maturing bonds when their existing debts mature, would amount to a default.

He said: "Fitch would regard such a debt exchange or voluntary debt rollover as a default event and would lead to the assignment of a default rating to Greece,", told a conference in Singapore early on Tuesday.

European leaders say that lenders would be under no compulsion to make the swap, rather than cashing the bond in, so Greece would not be defaulting on its debts. Fitch does not agree.

The Greek debt crisis: More on Mindful Money

Comment: Shaun Richards give his latest take on the Greek debt crisis.

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