S&P says French proposal could mean Greek default (by Barbara Kollmeyer)

MADRID (MarketWatch) -- Standard & Poor's Ratings Services on Monday said that June 24 proposals from the Federation Bancaire Francaise (FBF) aimed at easing repayment terms on Greek debt could constitute a default. "In brief, it is our view that each of the two financing options described in the FBF proposal would likely amount to a default under our criteria," S&P said in a statement. Each option falls into the S&P's category of "similar restructuring," it said. "This is because we believe --based on recent public statements of eurozone policymakers --that the aim of the financing options is to reduce the risk of a near-term debt payment default or debt restructuring with haircuts and give the Greek government more time to undertake fiscal consolidation and policy reforms," it said. S&P said any such transaction would result in investors getting less value than the original securities. S&P kept its rating on Greece at CCC, which it dropped from B on June 13.