Moody’s Warns on Downgrade of Greece, Late and Again (Spain too)

Another day, another late-late sovereign debt rating downgrade warning.  Moody’s has just placed the “Ba1” rating of Greece on review for a possible downgrade.  This is on the heels of a similar warning to Spain earlier.

The local and foreign currency government bond ratings were put on review.  Moody’s has noted that Greece’s country ceilings for its bonds and for bank deposits are NOT affected and those remain at a “Aaa” rating.

The concerns are an ability to cut debt to a sustainable levels, substantial revenue shortfalls, and the conditions of support that would be available if Greece’s market access becomes cut off.

Moody’s did signal that a multi-notch downgrade is possible if the review concludes that an increased risk of debt-to-GDP fails to stabilize or if the E.U. support becomes weaker.

The hardest poart of all of this is rather one of timing.  Who in the U.S. or the E.U. does not expect more sovereign ratings downgrades?  Very few.  That goes for the rest of the PIIGS too…

JON C. OGG