Egan-Jones Affirms Greece Rating at D
06/17/2012| 07:16pm US/Eastern
NEW YORK--Egan-Jones Sunday affirmed its rating on Greece at D, despite an evening victory for the pro-austerity New Democracy party in that country's elections.
"We expect that Greece will again be forced to restructure its debt within the next 6 to 24 months; it cannot sustain additional budget cuts, a collapsing economy, restricted capital access, and 20+% interest rates," wrote Egan-Jones in a note.
For many investors, Sunday's win by the New Democratic party over the anti-austerity Syriza party has eased some fears about a Greek exit from the 17-member euro zone. The euro rallied sharply early in Asia following the election results, trading above US$1.2700.
The remaining concern for Greece follows a series of ratings cuts from the ratings company, with Spain, Italy and the U.K. all seeing their ratings cut in recent weeks.
"The problem with Greece and the EU is massive support payments if Greece remains in the EU of nearly EUR60B per annum or defaults near EUR1.3 [trillion] if Greece were to exit," wrote the ratings firm.
Write to Geoffrey Rogow at firstname.lastname@example.org.