Greece Downgraded Again

 

From the WSJ: Greece Gets Yet Another Downgrade (ht Kevin)

Standard & Poor’s just cut Greece’s debt rating to CCC from B, meaning Greek debt is “extremely speculative.” The outlook for Greek debt is “negative.”

The downgrade reflects our view that there is a significantly higher likelihood of one or more defaults, as defined by our criteria relating to full and timely payment, linked to efforts by official creditors to close an emerging financing gap in Greece. This financing gap has emerged in part because Greece’s access to market financing in 2012 and possibly beyond, as envisaged in the current official EU/IMF program, is unlikely to materialize.
This lack of access, in our view, creates a gap between committed official financing and Greece’s projected financing requirements. Greece has heavy near-term financing requirements, with approximately EUR95 billion of Greek government debt maturing between now and the end of 2013 along with an additional EUR58 billion maturing in 2014.
Moreover, the downgrade reflects our view that implementation risks associated with the EU/IMF program are rising, given the increasingly complicated political environment in Greece coupled with its current difficult economic climate.

And from Reuters: LCH.Clearnet ups Irish, Portuguese bond repo margin

It raised the additional margin required to 65 percent from 45 percent for long positions on Portuguese government bonds when clearing transactions through its Repoclear service.
The equivalent Irish rate increased to 75 percent from 65 percent, LCH.Clearnet said in a statement on its website.

The yield on the Portugal 10 year is at a new high (10.7%) and Ireland 10 year too (11.35%).
Here are the links for bond yields for several countries (source: Bloomberg):

Greece
2 Year
5 Year
10 Year

Portugal
2 Year
5 Year
10 Year

Ireland
2 Year
5 Year
10 Year

Spain
2 Year
5 Year
10 Year

Italy
2 Year
5 Year
10 Year

Belgium
2 Year
5 Year
10 Year

France
2 Year
5 Year
10 Year

Germany
2 Year
5 Year
10 Year

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