ECONOMY

In Brief

Greece clinging on to Fitch investment grade Greece is barely holding on to its investment grade despite progress in slashing its deficit, says a senior analyst at Fitch, the last of the major rating agencies still ranking Greece in the investment grade category. «The country is clinging on to its investment grade rating, but just by a fingernail,» Fitch Rating’s senior analyst for Greece, Chris Pryce, told Reuters yesterday. «All the problems identified are there, there is no easy answer to them,» he said in a telephone interview, adding that the rating agency would take a «long, hard searching look» when it next visits Greece, probably at the end of October. The debt-laden country has suffered a series of downgrades since revealing last year that its budget deficit had spiraled to more than 13 percent of gross domestic product. It was shunned from major bond indices after being rated as junk by Moody’s and Standard and Poor’s this spring. It has since won praise from the European Union and the International Monetary Fund for cutting its deficit through a tough austerity plan but risks remain from lower-than-expected revenues as the recession bites. The IMF said last week that Athens was on track to slash its budget deficit according to plan this year but needed to further improve tax collection and control spending to sustainably shore up its finances. Risks also include spending in the wider public sector, including transport and health, Pryce said. «The government is meeting its side of the bargain, no doubt about that, but doing the right thing does not necessarily mean you can overcome the immense economic problems,» Pryce said. «We won’t be too disappointed if they miss the [2010 budget deficit] target by a small margin of 0.1 or 0.2 percent but they will have to be within close range, and I think they will.» (Reuters) Wind Hellas gets six bids from interested buyers Wind Hellas Telecommunications SA, Greece’s third-largest mobile phone operator, said it received offers from six groups after the company was put up for sale for missing debt payments. «The company will be pursuing discussions between the parties and its creditor groups to select a preferred bid by October 14,» Athens-based Wind Hellas said in an e-mailed statement yesterday, without naming the bidders. Egyptian billionaire Naguib Sawiris told Bloomberg News last week that he made a binding offer to buy the company after he effectively lost control in June. Other bidders include a group of Wind Hellas’s senior secured bondholders and Los Angeles-based Saban Capital Group Inc, said two people familiar with the matter, who declined to be identified because the discussions are private. Although Sawiris bought Wind Hellas out of bankruptcy less than 12 months ago, the company is now under the control of creditors after it deferred a 17.5-million-euro ($23-million) interest payment on its 250-million-euro revolving credit facility in June. It also missed a 23-million-euro coupon payment on its 1.2 billion euros of floating-rate notes. Sawiris’s bid includes a fresh cash component and a partial debt-for-equity swap under which creditors would give up some of their claims in exchange for shares in a restructured company. (Bloomberg) Deficit narrows Greece’s budget gap shrank 32.3 percent in the first eight months of the year, beating a 26.5 percent target for the period, as cuts in state wages and pensions offset slower-than-forecast increases in revenue. The deficit, which doesn’t include spending by state-owned institutions and companies, contracted to 14.5 billion euros ($18.5 billion) from 21.4 billion a year earlier, according to a statement yesterday from the Finance Ministry in Athens. The government is targeting an annual decline of 39.5 percent, the ministry said. The figures are broadly the same as preliminary data released on September 10. «The deficit reduction is characterized by the accumulation of interest payments in July and August 2010, which make up 40 percent of yearly interest payments as well as by a lag in revenue,» the ministry said. The Finance Ministry begins talks today with representatives of business groups on plans to offer terms to companies to pay past tax debts, according to an e-mailed statement yesterday. (Bloomberg)