"If an investor receives anything less than the full market value promised under the bond's contractual terms at each designated coupon payment date or at a principal maturity date, or adequate financial compensation for any variation in terms, it is most likely a default under our definition," Moody's said.
In short, to avoid a default under Moody's criteria, investors would have to voluntarily participate in the exchange; Greece would still have to be capable of making its debt-service payments; and the terms of the new transaction would have to be attractive on their own merit.
Given those criteria, "I can't see any way in the sweet world that Moody's can say anything other than 'default,'" credit analyst Gary Jenkins at Evolution Securities said Tuesday. "So they probably won't."
Of course, everything that will be done about the greek debt will be a default.
A default will be anything that makes investors receive less than they originally planned for. Anything that would help the Greeks would involve exactly that, paying less than originally agreed upon. Otherwise, it wouldn't help them much, would it?
There's just no way out of that dilemma, and while politicians have themselves fooled by the investment banks that sold credit insurance against the Greek debt blowup, at least this time, the rating agencies aren't buying the bullshit.
