LONDON Feb 22 A move by France to pay its debt
into a new version of the franc would result in a default
rating, S&P Global said on Wednesday, though continuing to pay
bondholders in euros could see it avoid that label.
French presidential hopeful Marine Le Pen - one of two
candidates likely to make a May election run-off - has said she
would take France out of the euro if she won and denominate its
national debt in a new currency.
"Were a government to unilaterally decide to pay a
euro-denominated instrument in a another currency contrary to
the original terms of the instrument, S&P Global Ratings would,
under its criteria, view this as a breach of the terms of the
instrument and therefore a default," S&P's chief sovereign
analyst Moritz Kraemer said in a report.
He added that a more technical "selective default" was more
common for governments than a plain vanilla default because
defaulting sovereigns often continue to service at least some of
Kraemer said even if a country decided to change its
currency, default could be avoided if the country continued to
service its legacy debt in the contractually agreed currency.
(Reporting by Marc Jones; Editing by John Geddie)