S&P Cuts Greece Rating to Selective Default

Downgrade is a response to Greek bond buyback, rating agency says.

Greece’s credit grade was reduced to SD, or selective default, by Standard & Poor’s from CCC after the government began buying its bonds back from investors, a statement on the rating company’s website said yesterday.

The nation has offered 10 billion euros ($13.1 billion) to purchase debt issued earlier this year as the bailed-out country attempts to cut a debt load that may threaten future international aid. The rating was lifted to CCC from SD in May after undergoing the largest sovereign restructuring in history earlier this year.

Debt Reduction

The purchases have helped buoy the nation’s debt. Greek bonds have returned 72 percent in the past three months, the best performance of 174 sovereign debt indexes tracked by the Federation of Financial Analysts Societies and Bloomberg.

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