The stakes may seem small compared with the 100 billion euro, or about $130 billion, restructuring of bonds governed by Greek law that was reached last month.
Most bondholders have already accepted the agreement, which stems from the restructuring of bonds related to Argentina's default in 2001.ConAgra, a maker of packaged food for supermarkets to sell under their own brand labels, agreed to pay $5 billion for Ralcorp, a rival.
But Mr. Baggaley of S.&P. said that the restructuring of bond payments could be considered a default, prompting the agency to lower Delta's rating to D for default, or S.D. for selective default, depending on the actions the airline takes.
And E.C.B. officials have been warning against any form of debt relief — in fact, last week one member of the governing council suggested that even a mild restructuring of Greek bonds would cause the E.C.B. to stop accepting those bonds as collateral for loans to Greek banks.
If it does this now there is still, just, enough time to organise a big, coercive, but orderly, restructuring of Greek bonds by March 20th.That is the route this newspaper has long advocated.
"Only a multiyear restructuring of the bond obligations, coupled with substantial deficit reduction, can achieve a permanent adjustment of Greece's fiscal obligations without actually defaulting on the paper and giving all stakeholders a haircut," Carl B. Weinberg, chief economist of High Frequency Economics in Valhalla, N.Y., said via e-mail on Sunday.
This month, the government completed the restructuring of two sovereign bonds with a face value of $1.1 billion.
At present, the restructuring of most sovereign bonds requires unanimity among bondholders.
The government is hoping to complete a go-it-alone restructuring of its defaulted bonds in September.
The banks were in trouble even before the restructuring of Greek government bonds opened up a €4 billion hole in their accounts last year.
Speaking of restructuring of defaulted junk bonds, right now it is one of the hottest confidence games being played on The Street.
