Moody's cuts Greek debt rating to junk

Tuesday, June 15, 2010


Moody's cuts Greek debt rating to junk

Moody's Investors Service slashed Greece's credit rating to junk status in a new blow to the country, which is under intense global scrutiny after narrowly avoiding default last month.

Moody's said Monday it was cutting Greece's government bond ratings by four notches to Ba1 from A3. It was the second of the three major agencies to accord Greek bonds junk status. Standard & Poor's did the same in late April.

Financial markets were little changed after the news, which just weeks ago would have sent stocks tumbling on fears that Europe's debt crisis was worsening.

A Greek Finance Ministry statement insisted that the recovery effort was on track. It said the new cut "does in no way reflect the progress made in recent months, nor the prospects emerging from fiscal improvement and better competitiveness."

-- Associated Press


Split CFTC approves box-office futures

Federal regulators on Monday allowed a new online exchange to proceed to trade future box-office receipts for movies.

A divided Commodity Futures Trading Commission approved by the mandated deadline the proposed futures contracts for the new Trend Exchange. That means the movie futures trading can proceed. The vote was 3 to 2.

Major Hollywood studios strongly oppose the idea. They say rival studios could sabotage films by betting against them.

Allowing future box-office receipts to be traded like crude oil or pork bellies would give people who finance movies a way to make money even when a film doesn't. It also could be used for speculation.

Trading would be based on the amount of money a movie takes in during its opening weekend. The exchange would set the initial odds for contracts, but those odds would change based on bidding of investors. An investor who buys a contract with longer odds takes on greater risk and the potential to earn more money.

-- Associated Press


U.S. auto recovery official to quit: Ed Montgomery, who led Obama administration efforts to help communities deal with the decline of the U.S. auto industry, is departing to become dean of Georgetown University's Public Policy Institute, the White House announced Monday.

Montgomery is set to leave as executive director of the White House Council on Automotive Communities and Workers on Aug. 15. The council was created to help communities deal with the bankruptcies of General Motors and Chrysler.

Lincoln Financial outlines TARP exit: Lincoln Financial Group said Monday it will issue shares and sell new debt to pay back the $950 million in federal government bailout aid. The insurer plans to sell $335 million of common stock and up to $750 million in senior notes. The proceeds of the share sale plus a $250 million notes offering will fund the repurchase of $950 million in preferred shares issued to the Treasury in May 2009. The company needs Treasury approval before it can repurchase the shares.

-- From news services

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