S&P downgrades Greek banks to SD

Standard & Poor's said it lowered its long- and short-term counterparty credit ratings on Alpha Bank AE, Eurobank Ergasias SA, National Bank of Greece SA and Piraeus Bank SA to SD (selective default) from CCC/C and its issue ratings on the banks' senior unsecured debt to CCC- from CCC.

The C subordinated debt ratings were affirmed.

S&P said the downgrades to SD follow the measures introduced by the Greek government on June 29. Specifically, these include limits to deposit withdrawals, the closure of bank branches for a full working week and the prohibition of money transfers out of Greece unless authorized by the Greek Ministry of Finance.

The actions reflect the agency’s opinion that private individuals' lack of access to their deposits on a timely and in-full basis, and the constraints to their ability to transfer funds, constitute a selective default under the criteria.

The downgrade of all outstanding senior unsecured notes to CCC- reflects S&P’s opinion that it is now inevitable that Greek banks will default within six months in the absence of support from the European Union authorities; S&P does not anticipate such support will be forthcoming.

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