BUSINESS

Fitch: voluntary Greek debt rollover would be default

Fitch Ratings warned it would treat a voluntary rollover of Greece's sovereign bonds in any rescue package as a default and would cut the credit rating, keeping pressure on European policymakers who intend to outline a new plan by mid July.

Fractious eurozone finance ministers are trying to patch together a second aid package for Greece, with more official loans and, for the first time, a contribution by private investors of Greek government bonds.

"The essence of the problem ... is that Greece needs new money,» Andrew Colquhoun, head of Asia-Pacific sovereign ratings with Fitch, said at a conference in Singapore.

"Fitch would regard such a debt exchange or voluntary debt rollover as a default event and would lead to the assignment of a default rating to Greece,» he said.

A month ago Fitch downgraded Greece's credit rating three notches to B plus and warned it could cut the rating further into junk territory. At the time, the rating agency said an extension of the maturity of existing bonds would be considered a default.

Fitch is not alone in warning that the EU's ideas may be propelling Greece towards a debt default.

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