S&P Downgrades Greece to CCC, Watch Greek Stock Indexes (10Y Bond Yield at 17.13%; 5Y CDS 1,590)

Standard and Poor's downgraded Greece to 'CCC' from 'B' today. Greece's 10-year government bond yield rose to 17.13% this morning and its 5Y credit default swap made a new high at 1,590 basis points. See charts below and an excerpt from the S&P report after the jump (and links to more yields).

I think Greek stocks will be interesting to watch going forward as Greece and other Eurozone members deal with their sovereign debt issues. $ATG (Greece General Shares) broke below 2000 and 2009 support and the next support level is between 865-900 (in 1996-1997). Watch it trade in its new channel up against downtrend resistance. There is also a Dow Jones Greece Index ($GRDOW) which looks similar. I'd like to see that above 2003 resistance.

Unfortunately there isn't an ETF trading in the U.S, but I found out there is one on the Xetra Exchange quoted in Euros (Lyxor ETF MSCI Greece - see chart #3). Are there option chains online anywhere I can watch on this ETF, or others.

$ATG (Greece (Athens) General Share (StockCharts)

$GRDOW (Dow Jones Greece Stock Index) - StockCharts.com

Lyxor ETF MSCI Greece (LYX0BF, Xetra Exchange)

10y Greece Bond Yield (Bloomberg, GGGB10YR)

Greece 5Y Credit Default Swap (Bloomberg, CGGB1U5)

"Long-Term Sovereign Rating On Greece Cut To 'CCC'; Outlook Negative

MADRID (Standard & Poor's) June 13, 2011--Standard & Poor's Ratings Services today said that it has lowered its long term sovereign credit ratings on Greece to 'CCC' from 'B'.

The short-term rating was affirmed at 'C'. The ratings were removed from CreditWatch. The outlook on the long-term ratings is negative.

Standard & Poor's '4' recovery rating for Greece remains unchanged--indicating an estimated 30%-50% recovery upon default--and its 'AAA' transfer and convertibility assessment for Greece, which applies to all members of the eurozone, also remains unchanged.

The downgrade reflects our view that there is a significantly higher likelihood of one or more defaults, as defined by our criteria relating to full and timely payment, linked to efforts by official creditors to close an emerging financing gap in Greece. This financing gap has emerged in part because Greece's access to market financing in 2012 and possibly beyond, as envisaged in the current official EU/IMF program, is unlikely to materialize. This lack of access, in our view, creates a gap between committed official financing and Greece's projected financing requirements. Greece has heavy near-term financing requirements, with approximately €95 billion of Greek government debt maturing between now and the end of 2013 along with an additional €58 billion maturing in 2014."

Moreover, the downgrade reflects our view that implementation risks associated with the EU/IMF program are rising, given the increasingly complicated political environment in Greece coupled with its current difficult economic climate." 

(Continue reading: http://www.standardandpoors.com/prot/ratings/articles/en/us/?assetID=1245306194528)

*More Greece yields at Bloomberg.com

30-year Greece Government Bond 

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