Standard & Poor's on Monday warned that if the French plan to roll over Greek debt is adopted it would probably lead to a "selective default" rating because it would lead to losses for bondholders, however voluntary.
Reuters reported that S&P issued the warning in response to a proposal put forth by French banks to voluntarily renew Greek debt. The banks have major exposure to Greece. Derivatives industry body ISDA had said that before the plan was unveiled that a voluntary rollover would "typically" not trigger credit default swap payments.
S&P disagreed, saying in a statement, "It is our view that each of the two financing options described in the [French banks'] proposal would likely amount to a default under our criteria."