Moody's says not involved in Greek rollover talks

Reuters

ATHENS (Reuters) - Moody's is not involved in talks on a Greek debt rollover plan and will only make its views known once there is a final decision on it, the ratings firm said on Monday after Standard and Poor's warned about the plan.

S&P said in a statement on Monday that Greece would likely be in default if it follows a debt rollover plan pushed by French banks, in a blow to plans to draft a new bailout plan in which EU policymakers want to involve private creditors.

Continue Reading Below

"Moody's is not a party to ongoing discussions on the Greek debt roll-over," the firm said in a statement to Reuters, when asked to comment about the French proposal.

"Once the authorities finalize their decision, any rating implications will be assessed through our published methodologies and definitions," the statement said.

North European creditor nations, led by Germany, are insisting that banks and insurers must share the burden of any new financial support for Greece, which is estimated to need some 110 billion euros in new funding until end-2014.

But European policymakers are also keen to avoid a default rating on Greece, fearing possible contagion effects to the rest of the euro zone.

French banks, major holders of Greek sovereign debt, proposed voluntarily renewing some of the bonds when they mature but on different terms, hoping the plan would not be considered a default.

According to the plan, bondholders would reinvest at least 70 percent of the proceeds from bonds maturing between now and the end of 2014 into new 30-year Greek debt.

In a report published last week, Moody's said it would view a distressed exchange -- which it qualified as an offer of a new debt instrument of diminished economic value meant to avoid bankruptcy -- as a default, but it did not specifically refer to the French plan.

Last month, Fitch said if it placed Greece's issuer rating on a "restricted default" because of a debt rollover plan the credit rating agency was likely to issue a new, higher rating within 14 days once the deal was done.

Officials at Fitch Ratings said on Monday they did not plan to make any further comment on the issue for the time being.

Greece is rated junk by the three major rating agencies.

(Reporting by Ingrid Melander; Editing by Diane Craft)