ECB suspends Greek debt as collateral following S&P downgrade

The ECB has temporarily suspended Greek debt for use as collateral following S&P yesterday cutting the country's credit rating to Selective Default from CC. S&P made its move after Athens launched a bond swap to lower its debt burden and inserted retroactive collective action clauses (CAC) into its loans. "The effect of a CAC is to bind all bondholders of a particular series to amended bond payment terms...and (it) materially changes the original terms of the affected debt," S&P said.