DBRS Cuts Greece’s Rating
DBRS cut its long-term foreign and local currency issuer ratings on Greece to triple-C from B
By CHELSEY DULANEY
May 15, 2015 7:36 p.m. ET
Canadian ratings service DBRS Inc. on Friday cut its rating on Greece, citing uncertainty over whether the country will be able reach an agreement with its creditors and stay current on its debt.
DBRS cut its long-term foreign and local currency issuer ratings to triple-C from B.
Meanwhile, Fitch Ratings affirmed its triple-C rating for the country. Fitch said “we expect that the government will survive the current liquidity squeeze without running arrears on privately-held bonds, but default is a real possibility.”
Political uncertainty has been weighing on Greece’s economy since late 2014, reversing a tentative recovery that began early last year.
Greece’s snap elections in January, which resulted in the election of a new government led by the radical-left Syriza party, have led to a monthslong standoff between Athens and its lenders-the rest of the eurozone and the International Monetary Fund-about the conditions of fresh bailout aid.
Uncertainty about whether Greece’s government might default on its debts this summer, potentially leading to the country’s exit from the euro, has unnerved businesses, consumers and bank depositors.
DBRS said Friday that Greece faces a series of payments to the International Monetary Fund and the European Central Bank in the coming weeks.
DBRS said without an agreement with creditors, its financing sources appear to be insufficient to meet its needs, due in part to a lack of access to bond markets.
DBRS said it believes a new longer-term program will likely be necessary to restore macroeconomic stabilization. The firm said a delay in an agreement has hurt economic recovery and stability.
Fitch said “we forecast no real GDP growth” for Greece this year, “with risks heavily tilted to the downside.”
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
By CHELSEY DULANEY
May 15, 2015 7:36 p.m. ET
Canadian ratings service DBRS Inc. on Friday cut its rating on Greece, citing uncertainty over whether the country will be able reach an agreement with its creditors and stay current on its debt.
DBRS cut its long-term foreign and local currency issuer ratings to triple-C from B.
Meanwhile, Fitch Ratings affirmed its triple-C rating for the country. Fitch said “we expect that the government will survive the current liquidity squeeze without running arrears on privately-held bonds, but default is a real possibility.”
Political uncertainty has been weighing on Greece’s economy since late 2014, reversing a tentative recovery that began early last year.
Greece’s snap elections in January, which resulted in the election of a new government led by the radical-left Syriza party, have led to a monthslong standoff between Athens and its lenders-the rest of the eurozone and the International Monetary Fund-about the conditions of fresh bailout aid.
Uncertainty about whether Greece’s government might default on its debts this summer, potentially leading to the country’s exit from the euro, has unnerved businesses, consumers and bank depositors.
DBRS said Friday that Greece faces a series of payments to the International Monetary Fund and the European Central Bank in the coming weeks.
DBRS said without an agreement with creditors, its financing sources appear to be insufficient to meet its needs, due in part to a lack of access to bond markets.
DBRS said it believes a new longer-term program will likely be necessary to restore macroeconomic stabilization. The firm said a delay in an agreement has hurt economic recovery and stability.
Fitch said “we forecast no real GDP growth” for Greece this year, “with risks heavily tilted to the downside.”
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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