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Fitch cuts & drops Greek sovereign bond ratings

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Fitch Ratings has downgraded 13 Fitch-rated Greek sovereign bonds to D from C following the confirmation by the Greek government that the exchange of all bonds in those series was completed on 11 April 2012 as part of its recently announced debt exchange.

According to Reuters, the ratings of the affected securities will be withdrawn on 20 April. At the same time, Fitch will also withdraw the outstanding C ratings on those Fitch-rated bonds which were not fully extinguished by the exchange.

Greeces Long-term foreign and local currency Issuer Default Ratings (IDRs) and the instrument ratings on the newly issued bonds are unaffected by this rating action and remain at B-. The Outlook is Stable.

Fitch currently rates 27 foreign-law Greek government bonds. The securities that were fully extinguished in the exchange include 13 Fitch-rated Foreign Law Republic Title bonds that received the requisite consents to the proposed amendments to those bonds at their individual bondholder meetings. For each series, 100% of the bonds have been incorporated into the exchange. In line with Fitchs guidance and in accordance with its Distressed Debt Exchange criteria, the ratings of these bonds have been downgraded to D.

Fitch notes that the Greek authorities have extended the deadline for all remaining holders of existing eligible securities to tender their bonds into the exchange to 20 April. Completion of the exchange for any of these bonds that are tendered by that date will take place on 25 April.

The 14 securities rated C by Fitch that have not been fully tendered into the exchange remain current. However, Fitch anticipates that they would default either on inclusion in the current exchange - following potential future bondholder agreement with the Greek authorities - or alternatively when future coupon or principal payments are missed, assuming they are not cured within the relevant grace period. Consequently, the agency considers that these ratings are no longer analytically meaningful and has therefore decided to withdraw them at the same time as the withdrawal of the issue ratings downgraded to D. The withdrawal of these ratings will be completed on 20 April.
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